Zama Achieves Unicorn Status with $57 Million Series B Funding

Zama, an open-source cryptography startup focused on enhancing privacy in public blockchains, has successfully raised $57 million in Series B funding, primarily led by Pantera Capital and Blockchange Ventures. This funding round elevates Zama’s valuation to over $1 billion, marking it as the first company specializing in advanced encryption to reach unicorn status.

Company Overview

Founded in 2020, Zama is committed to ensuring privacy in public blockchains while maintaining transparency and auditability. The recent funding coincides with the release of its public testnet and a unique “confidential” blockchain protocol, which empowers developers to create encrypted smart contracts and decentralized applications.

CEO Rand Hindi shared, “We are focusing on financial applications, particularly payments.” He emphasized the demand for confidentiality in on-chain payments, especially from stablecoin issuers and users.

Homomorphic Encryption

Central to Zama’s technology is homomorphic encryption, which allows the processing of encrypted data without decryption. This capability enables the issuance of cryptocurrencies and stablecoins and facilitates on-chain payments without disclosing transaction details.

Hindi described fully homomorphic encryption (FHE) as a means to recompute states using encrypted data while preserving public verifiability without exposing the actual data. He announced that Zama’s initial launch will occur on the Ethereum network before expanding to other Ethereum Virtual Machine (EVM)-enabled blockchains.

Future Expansion Plans

Zama plans to support Solana by 2026, adopting a dual approach that includes technology adaptation and performance optimization to meet Solana’s high transaction speed requirements.

Unlike transaction obfuscators like coin mixers, Zama focuses on encrypting content while maintaining transaction visibility, thereby allowing traceability while protecting user data.

Unique Features of Zama’s Protocol

A standout feature of Zama’s protocol is “programmable confidentiality,” enabling developers to determine who can decrypt on-chain data within smart contracts. For instance, a stablecoin issuer could grant specific access to users and compliance officers without enforcing blanket rules.

Hindi believes that achieving confidentiality alongside performance is crucial for the adoption of blockchain technologies, particularly for global financial applications. His personal achievement of Zama’s unicorn status comes after years of advocating for the importance of confidentiality in the field of cryptography.

Edited by Andrew Hayward