Revolutionizing Data Security: Zama Raises $73 Million in Series A Funding
Amidst a constant threat of data leaks and sophisticated hacking, it has become essential for companies to prioritize data security. While various techniques have been developed over the years, one approach, in particular, has shown great promise – homomorphic encryption.
The complex technique, which uses cryptographic algorithms to keep data secure during transmission, has eluded mass adoption due to scalability and slow performance. However, with the growing need for enhanced data security, investors continue to fund startups like Zama that are dedicated to making this concept a reality.
The Paris-based startup has recently raised an impressive $73 million in a Series A funding round, co-led by Multicoin Capital and Protocol Labs. This brings Zama’s valuation close to $400 million, with notable investors like Metaplanet, the first investor of DeepMind, also joining in.
The majority of the funding will be used to further research and development, as well as to expand the current team of 75 engineers. Zama has identified two market opportunities for their work – addressing blockchain transactions and enhancing data exchange for artificial intelligence training. The startup has already shared four open-source libraries on GitHub, which are currently being used by over 3,000 developers.
While numerous deep tech efforts are being made to improve the scalability of homomorphic encryption, Zama is also focused on establishing itself as a successful business.
“FHE is the most important foundational cryptographic primitive for the next decade of computing. Zama’s technology is the key to build multiplayer, privacy-preserving applications,” said Kyle Samani, managing partner of Multicoin Capital.
The market opportunity for homomorphic encryption is too significant to ignore. With their groundbreaking technology, Zama aims to build the next generation of crypto-enabled, privacy-first applications.
One of the main factors contributing to Zama’s success is their exceptionally talented team. Co-founder and CEO Rand Hindi, a computer science PhD, has a diverse range of interests including AI and data privacy. His previous startup, Snips, was acquired by Sonos. The other co-founder, CTO Pascal Paillier, is a cryptography expert with numerous patents to his credit.
The duo began working on the early technology for Zama as far back as 2016, but it wasn’t until 2019 that they made a breakthrough with algorithms that increased calculation speeds by 100 times.
Although this is still not fast enough for mainstream transactions, Zama has found success in catering to the needs of crypto developers. As Hindi states, “hundreds of thousands of people are building on the blockchain, and this gives them an opportunity to build more.”
The company’s notable solutions include fully homomorphic encryption libraries for machine learning, a compiler to translate Python programs into their FHE equivalent, and a library for interaction with Ethereum virtual machines using homomorphic encryption.
Zama competes with other startups in the same space, such as Ravel, Duality, and Enveil. However, the market is still relatively small, and the goal for now is to continue growing it.
“We are mostly friends with each other,” Hindi reveals. “The goal is not to fight, but to build a market – coopetition. We see each other at conferences and talk about our progress, and one day we will compete, but not today.”
Zama’s successful funding round is a testament to the potential demand for homomorphic encryption and the trust that investors have in the startup’s capabilities. With further research and development, we can hope to see this revolutionary data security technique become more accessible and widely adopted in the future.
