Zama Raises $57 Million Becomes First FHE Unicorn

Zama, an open-source cryptography company specializing in fully homomorphic encryption (FHE) solutions for blockchain, has successfully raised $57 million in its Series B funding round. This round was co-led by US-based investment firms Blockchange Ventures and Pantera Capital, bringing Zama’s total funding to over $150 million and its valuation to over a billion USD. This funding round marks a significant milestone as Zama becomes the world’s first FHE unicorn.

The new funding will be utilized to support Zama’s mainnet launch, ecosystem adoption, and research efforts aimed at scaling financial applications built with FHE to thousands of transactions per second. The timing of this announcement reflects the growing demand within the finance ecosystem for technologies that enable confidential, scalable, and compliant on-chain financial applications.

Dr. Rand Hindi, CEO and co-founder of Zama, expressed his excitement about the funding, stating that reaching a $1 billion valuation signifies the market’s confidence in Zama’s FHE technology and the team’s ability to deliver confidentiality to financial applications on-chain. The funding coincides with the announcement of Zama’s Confidential Blockchain Protocol and its public testnet, which will be available in July 2025. This will enable developers to build confidential applications through Zama’s FHEVM, with support for other EVM chains and Solana to follow.

Ken Seiff, co-managing partner of Blockchange Ventures, highlighted the potential of Zama’s technology, comparing it to the foundational impact of Ethereum in 2014. He noted that as finance moves on-chain and regulations tighten globally, public blockchains are likely to be the first beneficiaries of Zama’s technology. However, the opportunity extends beyond finance, as industries such as healthcare, defense, and cloud computing could also benefit from the enhanced confidentiality and compliance offered by FHE.

Paul Veradittakit, managing partner at Pantera, emphasized that Zama’s FHE protocol launch is a significant milestone in cryptography. By enabling efficient, developer-friendly FHE, Zama unlocks secure, compliant, and verifiable decentralized applications (DApps) for AI, crypto, and cloud. The protocol paves the way for on-chain identity, financial, and consumer applications that were previously out of reach for developers.

Zama’s FHEVM allows for the execution of confidential smart contracts on encrypted data, ensuring both confidentiality and composability. This blockchain-native confidentiality unlocks several use cases, including on-chain finance, confidential tokens, identity and proof of humanity, and network states. Financial institutions can securely use public blockchains for various applications, such as confidential stablecoin issuance and payments, asset tokenization, and compliance. Confidential tokens enable blockchain companies to distribute tokens confidentially, reducing the risk of hacking. Identity and proof of humanity features allow application developers to verify whether a user is human without disclosing their identity publicly. Network states enable on-chain communities and network states to operate confidentially, running key infrastructure on public blockchains.

Zama will use the fresh funding to advance the field of FHE and further commercialize its accessibility to blockchain applications and beyond. The company is actively addressing core challenges that have historically held back FHE adoption, such as speed, hardware integration, and developer usability. Zama’s FHE technology is currently 100x faster than when the company was founded and is capable of supporting most on-chain payment use cases. The company expects its technology to be 100x more scalable within the next five years, allowing it to address the most demanding on-chain applications. Using GPUs enables Zama to scale to hundreds of transactions per second, and the company is working towards a dedicated hardware-accelerated chip to advance FHE performance, with the ultimate goal of reaching tens of thousands of transactions per second. Additionally, using Zama does not require learning new programming languages, as developers can use Solidity and other existing languages and deploy their applications on their preferred chain.

Dr. Rand Hindi further emphasized that this funding round underscores a broader shift, where confidentiality is no longer a niche concern but a foundational requirement. The broad adoption of blockchain in finance is driving demand for secure, confidential computing technologies. Zama was founded by Dr. Pascal Paillier and Dr. Rand Hindi and has the largest research team in homomorphic encryption. Its technology enables a broad range of use cases, from confidential finance to Web 3.0 and network states. To learn more about Zama, users can visit the company’s website.