Zama Raises $57 Million in Series B Funding, Becomes FHE Unicorn

Zama, a company specializing in open-source cryptography, has successfully raised $57 million in its Series B funding round. This investment was co-led by prominent U.S.-based investment firms, bringing Zama's total funding to over $150 million and its valuation to over a billion USD. The new funding will support Zama’s mainnet launch, ecosystem adoption, and research efforts to make financial applications built with Fully Homomorphic Encryption (FHE) scale to thousands of transactions per second.

The announcement coincides with the launch of the Zama Protocol, which enables confidential applications on any blockchain. Starting from July 2025, developers will be able to build FHE applications on Zama’s public testnet. The protocol supports other EVM chains and Solana, with plans to expand further.

Dr. Rand Hindi, CEO and co-founder of Zama, highlighted the significance of this milestone, stating that Zama is now the world’s first FHE unicorn. This achievement reflects the market’s confidence in Zama’s FHE technology and the team’s ability to deliver confidentiality to financial applications onchain.

Ken Seiff, Co-Managing Partner of Blockchange Ventures, compared Zama’s technology to the foundational impact of Ethereum in 2014. He noted that as finance moves onchain and regulations tighten globally, public blockchains are likely to be the first beneficiaries of Zama’s technology. The potential applications extend beyond finance to industries such as healthcare, defense, and cloud computing, which could 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 onchain 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 technology unlocks several use cases, including onchain finance, confidential tokens, identity and proof of humanity, and network states. Financial institutions can securely use public blockchains for applications such as confidential stablecoin issuance and payments, asset tokenization, and compliance. Blockchain companies can distribute tokens confidentially, reducing the risk of hacking. The ability to verify whether a user is human without disclosing their identity publicly enhances the security of onchain finance. Additionally, onchain communities and network states can operate confidentially, running key infrastructure on public blockchains.

Zama will use the new funding to advance the field of FHE and further commercialize its accessibility to blockchain applications and beyond. The company is addressing core challenges that have historically held back FHE adoption, including speed, hardware integration, and developer usability. Zama’s FHE technology is currently 100x faster than when the company was founded and is expected to be 100x more scalable within the next five years. The use of GPUs enables Zama to scale to hundreds of transactions per second, with plans to develop a dedicated hardware-accelerated chip to reach tens of thousands of transactions per second. Developers can use existing languages like Solidity to deploy their applications on their preferred chain, making Zama’s technology more accessible.

Dr. Rand Hindi emphasized that 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, founded by Dr. Pascal Paillier and Dr. Rand Hindi, has the largest research team in homomorphic encryption and is committed to building state-of-the-art FHE solutions for blockchain. Its technology enables a broad range of use cases, from confidential finance to Web3 and network states.