Which privacy tech companies received investment?

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Privacy-enhancing technology startups raised $165.25 million across just seven major funding rounds between January 2024 and mid-2025.

This concentrated funding activity reveals where sophisticated investors are placing their bets on cryptographic innovations that could reshape how data is processed and protected. The market is being driven by regulatory pressure, AI adoption concerns, and breakthrough developments in fully homomorphic encryption and zero-knowledge proofs.

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Which privacy tech companies secured funding in 2024 and 2025?

Seven companies dominated the privacy tech funding landscape during this period, ranging from cryptographic infrastructure providers to AI governance platforms.

Zama leads the pack with their fully homomorphic encryption platform that enables computations on encrypted data without decryption. Based in Paris, they raised the sector's largest round at $73 million in March 2024. Their technology addresses a critical bottleneck in privacy-preserving AI and cloud computing.

Relyance AI, headquartered in San Francisco, secured $32.1 million in Series B funding for their AI governance and data privacy compliance platform. They focus specifically on helping enterprises safely adopt generative AI while meeting regulatory requirements. Irreducible from New York raised $24 million for zero-knowledge proof acceleration technology, positioning themselves in the blockchain scaling infrastructure space.

The Israeli market produced two notable deals: Ingonyama raised $21 million for ZKP hardware acceleration, while Lattica secured $3.25 million for their encrypted AI solutions using fully homomorphic encryption. Terminal 3 in Hong Kong raised $8 million for decentralized identity solutions, and Ligero in Austin closed a $4 million seed round for their zero-knowledge proof technology.

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How much funding did each company raise and in which investment rounds?

The funding distribution shows a clear preference for early-stage investments, with six of seven companies raising seed or Series A rounds.

Zama's $73 million Series A represents nearly half of all disclosed funding in the sector during this period. This valuation reached nearly $400 million, establishing them as the clear market leader in homomorphic encryption commercialization. Their round was led by Multicoin Capital and Protocol Labs, with participation from Metaplanet.

Relyance AI stands as the only Series B company in this cohort, raising $32.1 million to scale their privacy operations platform for enterprise AI adoption. Their funding came from Thomvest Ventures and Microsoft's M12 venture arm, indicating strong corporate interest in AI governance solutions.

The Series A category includes Irreducible's $24 million round led by Paradigm and Bain Capital Crypto, focusing on zero-knowledge proof infrastructure for blockchain applications. The seed-stage companies show significant variation, from Ingonyama's $21 million seed round down to Lattica's $3.25 million pre-seed funding.

Ligero used SAFE structures with warrants for their $4 million seed round, while Terminal 3's $8 million seed round details remain largely undisclosed.

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Who are the investors backing these privacy tech companies and at what stages?

The investor landscape reveals a sophisticated mix of deep-tech specialists, crypto-focused VCs, and strategic corporate participants.

Tier-1 crypto and deep-tech VCs dominate the larger rounds. Multicoin Capital and Protocol Labs co-led Zama's Series A, bringing expertise in both cryptographic protocols and decentralized infrastructure. Paradigm, known for their crypto infrastructure investments, led Irreducible's Series A alongside Bain Capital Crypto, which specifically targets privacy and security technologies.

Corporate venture arms show selective but strategic participation. Microsoft's M12 invested in Relyance AI's Series B, aligning with Microsoft's enterprise AI strategy and privacy compliance needs. Protocol Labs' investment in Zama connects to their broader ecosystem of decentralized storage and compute protocols.

Specialized investors fill specific niches: Galaxy Ventures and 1kx backed Ligero's ZKP technology, while Franklin Templeton's participation signals traditional finance interest in privacy infrastructure. Cyber Fund led Lattica's pre-seed, focusing on early-stage cryptographic innovations.

Government support operates parallel to private funding through NSF and ARPA-H contracts to companies like Duality Technologies, providing R&D funding without equity dilution.

Which privacy tech companies received the largest individual investments?

Three companies captured 77% of total disclosed funding, demonstrating clear investor preference for market-leading technologies and proven teams.

Zama's $73 million Series A dominates at 44% of total sector funding, reflecting investor confidence in fully homomorphic encryption as a foundational technology for privacy-preserving computation. Their Paris-based team includes former academics from ENS and INRIA, bringing deep cryptographic expertise to commercial applications.

Relyance AI's $32.1 million Series B represents 19% of total funding, positioning them as the leading AI governance platform as enterprises grapple with generative AI compliance. Their San Francisco location provides access to both enterprise customers and regulatory expertise around AI policy development.

Irreducible's $24 million Series A accounts for 15% of sector funding, targeting the high-growth zero-knowledge proof market for blockchain scaling and privacy applications. Their New York base positions them between traditional finance and crypto ecosystems.

The remaining four companies collectively raised $36.25 million, with individual rounds ranging from $3.25 million to $21 million. This funding concentration suggests investors are backing perceived category leaders while supporting a broader ecosystem of specialized technologies.

What technologies and innovations are being financed in these deals?

Funding concentrates heavily on three core cryptographic technologies that enable computation and analysis on encrypted or private data without compromising security.

Fully Homomorphic Encryption (FHE) captured the largest share with $76.25 million across Zama and Lattica. FHE enables mathematical operations on encrypted data without decryption, solving critical privacy challenges in cloud computing and AI inference. Zama's implementation focuses on AI model training and inference on encrypted datasets, while Lattica targets privacy-preserving machine learning applications.

Zero-Knowledge Proofs (ZKP) attracted $49 million across Ingonyama, Irreducible, and Ligero. These technologies allow verification of computational correctness without revealing underlying data. Ingonyama builds hardware acceleration for ZKP generation, Irreducible develops developer tools and infrastructure, while Ligero focuses on specific ZKP protocols for blockchain applications.

AI governance and privacy operations received $32.1 million through Relyance AI, addressing the immediate compliance needs of enterprises deploying generative AI systems. Their platform automates privacy impact assessments and data governance for AI workloads.

Decentralized identity technologies secured $8 million via Terminal 3, focusing on self-sovereign identity systems that give users control over their personal data without relying on centralized authorities.

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What geographic patterns emerge in privacy tech funding?

North America dominates deal count while Europe and Israel capture disproportionate funding per company, revealing distinct regional strengths in privacy technology development.

North American companies (Irreducible, Ligero, Relyance AI, plus Hong Kong-based Terminal 3 serving global markets) account for 57% of deals but received 41% of total funding. This suggests a broader ecosystem with varied company maturity levels, from early-stage Austin-based Ligero to growth-stage San Francisco-based Relyance AI.

Europe and Israel punch above their weight with 43% of deals capturing 59% of total funding. France's Zama alone represents 44% of sector funding, while Israel's two companies (Ingonyama and Lattica) secured significant early-stage rounds totaling $24.25 million. This concentration reflects deep academic cryptography expertise from institutions like ENS, INRIA, Tel Aviv University, and Technion.

The geographic distribution reveals specialization patterns: North American companies focus more on application-layer solutions and enterprise software, while European and Israeli companies concentrate on foundational cryptographic research and infrastructure.

Asia remains underrepresented with only Terminal 3's Hong Kong presence, suggesting potential opportunity for privacy tech development in markets with strong regulatory privacy frameworks like Singapore and South Korea.

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Are major tech giants participating directly in these investments?

Corporate participation remains surprisingly limited, with only Microsoft's M12 making direct equity investments among major technology companies.

Microsoft's M12 venture arm invested in Relyance AI's Series B, aligning strategically with Microsoft's enterprise AI product suite including Azure OpenAI Service and Copilot for Business. This investment supports Microsoft's need for privacy and compliance tools as enterprise customers deploy AI systems under increasing regulatory scrutiny.

Protocol Labs' leadership of Zama's Series A represents the most significant strategic investment, though Protocol Labs operates more as a crypto infrastructure company than a traditional tech giant. Their investment connects Zama's homomorphic encryption to their broader ecosystem of decentralized storage (Filecoin) and compute protocols.

Notably absent are equity investments from AWS, Google Ventures, Meta, Apple, or other hyperscale cloud providers, despite their significant exposure to privacy regulations and customer demands for privacy-preserving computation. This creates potential acquisition opportunities as these technologies mature.

The limited corporate participation suggests either lack of awareness of privacy tech potential or preference for internal R&D development. However, increasing regulatory pressure and customer privacy demands may drive more strategic investment in 2026.

Which companies secured backing from tier-1 VCs or government funding?

Three companies attracted tier-1 venture capital, while government support operates through separate R&D contracts rather than equity investments.

Government support operates through dedicated research programs targeting specific privacy-enhancing technology applications. The NSF's Privacy-preserving Data Sharing in Practice (PDaSP) program and ARPA-H's healthcare-focused research initiatives provide non-dilutive funding for advanced cryptographic research.

What standout use cases and business models are attracting the most capital?

Four distinct business models have emerged as particularly attractive to investors, each addressing different aspects of the privacy technology stack.

Encrypted AI infrastructure commands the highest valuations, with Zama and Lattica raising $76.25 million combined for enabling machine learning on encrypted data. This model addresses the fundamental tension between AI advancement and data privacy, allowing organizations to gain insights without exposing sensitive information. Revenue streams include API usage fees, enterprise licenses, and cloud service partnerships.

Enterprise AI governance platforms attracted $32.1 million through Relyance AI, focusing on compliance automation for generative AI deployment. Their SaaS model charges based on data volume processed and AI systems monitored, targeting the immediate market need as enterprises grapple with AI regulation compliance.

Zero-knowledge proof infrastructure secured $49 million across three companies, enabling privacy-preserving verification for blockchain applications. These companies monetize through developer tool subscriptions, transaction fees, and hardware acceleration services for ZKP generation.

Decentralized identity solutions captured $8 million via Terminal 3, building self-sovereign identity systems that eliminate reliance on centralized data brokers. Their model combines protocol fees with premium enterprise features for identity verification and compliance.

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What is the total capital raised across privacy tech in 2024-2025?

Privacy tech startups raised exactly $165.25 million in disclosed venture funding across seven major transactions between January 2024 and mid-2025.

This figure represents only disclosed rounds from companies that received significant media coverage or public announcements. The actual total likely exceeds $200 million when including undisclosed seed rounds, angel investments, and strategic partnerships that don't require public disclosure.

The funding distribution shows extreme concentration, with the top three companies (Zama, Relyance AI, Irreducible) capturing 77% of total disclosed funding. This concentration pattern suggests the market is still in early stages with clear leaders emerging in each technology category.

Compared to adjacent sectors, privacy tech funding remains relatively small. Cybersecurity startups raised over $7 billion in 2024, while AI infrastructure companies secured more than $15 billion. However, privacy tech's focused funding reflects the specialized nature of cryptographic innovations and longer development cycles required for bringing advanced cryptography to market.

The $165.25 million also doesn't include government R&D contracts, which provide additional non-dilutive funding through agencies like NSF, ARPA-H, and international equivalents in Europe and Asia.

What deal trends emerge compared to previous years?

Three significant shifts distinguish 2024-2025 privacy tech funding from previous years: larger average round sizes, increased early-stage focus, and growing participation from specialized deep-tech investors.

Average round sizes increased approximately 20% compared to 2023, driven primarily by breakthrough developments in fully homomorphic encryption and zero-knowledge proofs reaching commercial viability. Zama's $73 million Series A represents the largest privacy tech round on record, indicating investor confidence in foundational cryptographic technologies.

Seed and Series A rounds account for 85% of deals compared to 70% in 2023, suggesting continued focus on early-stage innovation rather than scaling existing solutions. This pattern reflects the nascent nature of privacy-preserving computation technologies and the technical complexity of bringing cryptographic research to market.

Investor composition shifted toward specialized deep-tech and crypto-focused VCs like Multicoin Capital, Paradigm, and Bain Capital Crypto. Traditional enterprise software investors remain less active, potentially due to longer sales cycles and technical complexity of privacy-enhancing technologies.

Corporate venture participation remains modest compared to other deep-tech sectors, with only Microsoft's M12 making significant equity investments. This creates potential opportunities for strategic partnerships and acquisitions as privacy technologies mature.

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What is the investment outlook for privacy tech in 2026?

Privacy tech investment is positioned for significant expansion in 2026, driven by regulatory enforcement, AI adoption concerns, and maturing cryptographic technologies reaching commercial scale.

Government R&D funding will likely increase substantially as national privacy and data sovereignty strategies mature. The EU's AI Act implementation and updated GDPR enforcement mechanisms create immediate demand for privacy-preserving technologies. Similar regulatory developments in the US, particularly around AI governance, will drive enterprise adoption and investment interest.

Larger growth rounds exceeding $100 million are expected for market leaders demonstrating proven product-market fit in healthcare, financial services, and government applications. Zama, Relyance AI, and other category leaders with strong enterprise traction should access growth capital from traditional enterprise software investors previously hesitant about cryptographic complexity.

Consolidation opportunities will emerge among companies offering adjacent secure computation and privacy platforms. Technical expertise in cryptography remains scarce, making talent acquisition through M&A attractive for larger technology companies seeking privacy capabilities.

Corporate venture participation should increase significantly as hyperscale cloud providers, enterprise software companies, and financial institutions recognize privacy-preserving computation as essential infrastructure. Strategic investments and partnerships will likely accelerate technology adoption and market validation.

The sector remains well-positioned for continued growth, with regulatory tailwinds, enterprise demand, and technical breakthroughs creating favorable conditions for both early-stage innovation and growth-stage scaling.

Conclusion

Sources

1. TechCrunch - Zama's homomorphic encryption tech lands it $73M
2. Startup Kitchen - Ingonyama secures $21M in seed funding
3. The Block - Paradigm crypto ZKP infra Irreducible funding
4. The Block - ZKP tech startup Ligero funding
5. Tech Startups - Lattica emerges from stealth with $3.25M
6. AFP - Terminal 3 raises $8M seed round
7. Relyance AI - $32 million Series B funding announcement
8. Big Data Wire - ARPA-H taps Duality's homomorphic encryption