Silence Laboratories, a startup that builds infrastructure using multiparty computation (MPC) to help enterprises keep data private and safe, said it has raised a $4.1 million funding round.
Pi Ventures and Kira Studio co-led the recent funding, which brings its total raised to $6 million, along with angel investors. The startup will use the funding to scale its teams and beef up its R&D pipeline.
The startup’s infrastructure uses MPC, a subset of cryptography, which enables two or more parties to collaborate on processing without exposing sensitive and private information to the other engaging parties.
Founded in 2021 by Dr. Jay Prakash (CEO), Dr. Andrei Bytes (CTO), and Dr. Tony Quek, Silence is a spinoff of more than a decade of R&D in applied cryptography and application security. The outfit started as a multifactor authentication (MFA) company and pivoted its business to building a cryptographic security firm.
“We found a product-market fit (PMF) in privacy-preserving decentralized authorization and computation while talking to early customers who were building digital asset-based products and since then, we have been building cryptographic libraries to solve the pertinent problem of a single point of failure and exposure of secrets, be it at rest or in use,” Prakash explained.
Consumer concerns over data privacy are mounting, and regulators globally step up data privacy requirements. For that reason, large corporations are responsible for managing the data they collect and protecting users’ data from the risk of leaking by hackers.
“Credit scoring, financial risk analysis, or tracking money laundering the way it works today expects data from all sources to be dumped in one location and then processed,” Prakash said. “The processing entity is exposed to huge risk and liabilities, which also deters collaborations. It has been found in multiple case studies that if privacy can be guaranteed, richer collaborations are possible, which would improve the quality of data and hence the analysis.”
Products and users
The three-year-old outfit offers two products using MPC technology: Silent Shard and Silent Compute.
Silent Shard, audited by a security auditing company called Trail of Bits, enables enterprises and users to limit the risk of exposing sensitive private keys and implements advanced authorization rules. It also recently launched Silent Compute, which lets corporations collaborate on processing information without revealing their own private data to third parties and enrich insights while maintaining compliance and trust.
The startup operates in a B2B licensing model where its libraries offer a suite of features and wrappers for the platform and application-agnostic package. Prakash told TechCrunch its target customers include digital assets enterprises, financial and healthcare organizations, and telecommunication companies.
More than 20 enterprise customers use Silence’s products. Its customers include BitGo, MetaMask, and EigenLayer, which recently raised $100 million from Andreessen Horowitz. The startup CEO noted more partnerships — in the financial, anti-money laundry, and healthcare sectors — are coming up in the offing.
Silence generates around $500,000 in annual recurring revenue. The company charges based on the number of accounts it protects and the features it supports, Prakash noted.
“The pricing is a function of which category the customers are: large enterprises with niche features, medium-scale businesses or early-stage companies with need of early support,” Prakash said.
Many larger crypto firms have integrated multiparty computation (MPC) capabilities into their service via acquisitions in the last two years. Coinbase bought Unbound Security, a crypto custody infrastructure firm 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 privacy-enhancing technology (like MPC) market size is projected to reach a valuation of $25.8 billion by 2033, 26.6% up from $ 2.4 billion in 2023.
“With deep cryptography expertise, [The Silence team] is working on a set of groundbreaking products in privacy and authentication infrastructure,” founding partner of Kira Studio and former co-founder of Polygon Anurag Arjun said. “Privacy-preserving infrastructure combined with blockchain and fintech rails is going to be huge.”