Solana-based confidential computing startup acquires Web2 competitor
As part of the deal, Arcium will take over Inpher’s core team and technology: Lightspeed exclusive
Artwork by Crystal Le
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The Solana-based confidential computing startup Arcium has acquired one of its Web2 competitors in Inpher, the team told Lightspeed exclusively.
As part of the deal, Arcium will take over Inpher’s core team and technology. The terms were not disclosed. The crypto startup’s acquisition of a non-crypto startup comes shortly after Stripe’s acquisition of the stablecoin platform Bridge raised hopes that the market for mergers and acquisitions could be heating up in crypto.
Arcium started as a Solana privacy protocol named Elusiv before rebranding to a generalized confidential computing startup. In May, the team announced a $5.5 million strategic funding round led by Greenfield Capital with the pledge to help developers create “fully confidential applications onchain.” Arcium is yet to launch.
During a conversation at a coffee shop in Manhattan, I recently asked the company’s CEO Yannik Schrade why the world needs confidential computing.
“Want to tell me your social security number? No?” he asked in response. He added that sensitive data is often stored on the internet in an encrypted format, but when information is converted, it needs to be decrypted, which leads to a “single point of failure” that could expose sensitive information. Schrade added that use cases like collaborative AI training could use confidential computing to mitigate the risk of data breaches.
Schrade called the Inpher team a research-driven “powerhouse” that has made important contributions to cryptography. “Now we have a very important set of PhDs in the Solana ecosystem,” Schrade said.
Inpher raised a total of $14 million since 2016, with backers including JPMorgan and the Amazon Alexa Fund, according to Crunchbase. It had lately begun marketing itself as a service for interacting with AI privately and securely.
Confidentiality is a core component of crypto, which can theoretically serve as a means by which multiple parties can transact or collaborate without needing to trust each other. But so far, some of the more futuristic possible applications for technology like zero-knowledge proofs — which can verify a message is true without revealing its contents — are yet to be realized.
Schrade poked a nicotine pouch into his lip before explaining his approach:
“We’re not just doing some abstract research papers that at the end of the day maybe nobody would use, but instead we are making practical technology, practical research and combining that with interfaces that developers can just use without having to learn any new paradigms.”
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