Zama Secures $73 Million Investment for Homomorphic Encryption Technology Valued Nearly $400M
Homomorphic encryption, a complex method utilizing cryptographic algorithms to maintain data security during network transmission and sharing, remains challenging to achieve mass-scale implementation due to its intricacy. However, the potential benefits for long-term data protection make it an attractive investment target. Recently, Paris-based startup Zama secured a $73 million Series A financing led by Multicoin Capital and Protocol Labs, boasting a near-$400M valuation.
Investment interest in homomorphic encryption stems from its ability to ensure data confidentiality amidst increasing cyber threats. Among the notable investors contributing to Zama’s latest round is Metaplanet, an Estonian deep tech investor known for backing DeepMind and numerous other projects. This marks the biggest funding round for a homomorphic encryption company in Europe and potentially worldwide.
Despite the ongoing global funding crunch, European deep tech ventures persistently attract significant investments. Another recent recipient of substantial funds is multiverse computing Quantum startup, which received $27 million earlier this week. Zama plans to allocate the new capital towards research and development and expanding their engineering team of 75 members. Their primary focus lies in addressing two emerging markets: blockchain transactions and artificial intelligence training and utilization.
Since launching commercial operations six months ago, Zama has reported signing contracts worth over $50 million. Despite the majority of clients originating from the blockchain sector, the eventual objective is to penetrate the broader machine learning industry. To facilitate growth, Zama offers open-source FHE tooling and maintains a user base of approximately 3,000 developers.
Kyle Samani, Managing Partner of Multicoin Capital, expressed confidence in Zama’s technology, stating “FHE is the most important foundational cryptographic primitive for the next decade of computing.” He further emphasized the importance of Zama’s work on open-source FHE tooling and its role in developing future crypto-enabled, privacy-focused applications.
With a strong founding team consisting of Rand Hindi, a computer scientist holding a Ph.D. in Bioinformatics, and cryptography expert Pascal Paillier, Zama began working on the technology as early as 2016. Their breakthrough came in 2019 when they successfully accelerated calculations by 100x, enabling the transformation of their research into a viable business venture. Though not yet providing practical speeds for most transactions, Zama’s solutions cater specifically to the slower nature of blockchain transactions, offering valuable services to crypto developers.
As the field of homomorphic encryption progresses, companies such as Zama remain committed to pushing boundaries and improving efficiency while fostering collaboration within the community rather than competition.
