Silence Labsa startup that builds infrastructure using polynomial computation (MPC) to help businesses keep data private and secure, said it has raised a $4.1 million funding round.
Pi Ventures and Kira Studio co-led the recent funding, which brings the total to $6 million, along with angel investors. The startup will use the funding to scale its teams and strengthen its R&D pipeline.
The startup’s infrastructure uses MPC, a subset of cryptography, which allows two or more parties to collaborate on processing without exposing sensitive and private information to the other parties involved.
Silence was founded in 2021 by Dr. Jay Prakash (CEO), Dr. Andrei Bytes (CTO) and Dr. Tony Quek, Silence is a spinoff of a decade of research and development in applied cryptography and application security. The outfit started out as a multi-factor authentication (MFA) company and turned its business to building a crypto security company.
“We found a product market fit (PMF) in decentralized authorization and privacy-preserving computing while talking to early customers who were building digital asset-based products, and since then, we’ve been building cryptographic libraries to solve the associated problem of a single point of failure and revealing secrets, whether they are at rest or in use,” Prakash explained.
Consumer concerns about data privacy are growing and regulators worldwide are strengthening data privacy requirements. For this reason, large companies are responsible for managing the data they collect and protecting user data from the risk of being leaked by hackers.
“Credit rating, financial risk analysis or money laundering monitoring the way it works today expects data from all sources to be dumped into one location and then processed,” said Prakash. “The processing entity is exposed to huge risks and liabilities, which also prevents partnerships. It has been found in multiple case studies that if privacy can be ensured, richer collaborations are possible, which would improve data quality and therefore analysis.”
Products and users
The three-year-old outfit offers two products that use MPC technology: Silent Shard and Silent Computing.
Silent Shard, tested by a security audit company called Trail of Bits, enables businesses and users to limit the risk of exposing sensitive private keys and implements advanced authorization rules. It also recently launched Silent Compute, which allows companies to work together to process information without disclosing their personal data to third parties and enrich information while maintaining compliance and trust.
The startup operates on a B2B licensing model, where its libraries offer a range of features and wrappers for platform and package agnostic applications. Prakash told TechCrunch her target customers include digital asset businesses, financial and healthcare organizations, and telecommunications companies.
More than 20 corporate customers use Silence products. Its clients include BitGo, MetaMask and EigenLayer, which recently raised $100 million from Andreessen Horowitz. The startup’s CEO noted that more partnerships — in the financial, money-laundering and healthcare sectors — are coming to the fore.
Silence generates approximately $500,000 in annual recurring revenue. The company charges based on the number of accounts it protects and the features it supports, Prakash noted.
“Pricing is a function of what category the customers are: large enterprises with specialized features, mid-sized enterprises or early-stage companies that need early support,” Prakash said.
Many larger crypto companies have integrated multiparty computing (MPC) capabilities into their services through acquisitions over the past couple of years. Coinbase bought Unbound Securitya crypto custodial infrastructure company specializing in MPC, in November 2021. Blockdaemon acquired Sepior, a digital asset security company that offers key management services for institutional clients, in July 2022. The market size of its enhancement technology privacy (like MPC) projected to reach a valuation of $25.8 billion by 2033a 26.6% increase from $2.4 billion in 2023;
“With deep expertise in cryptography, [The Silence team] is working on a set of breakthrough products in privacy and authentication infrastructure,” said Kira Studio founder and former Polygon co-founder Anurag Arjun. “Privacy infrastructure combined with blockchain and fintech rails is going to be huge.”
