Austrian startup TACEO has completed a $5.5 million seed funding round to advance its encrypted data collaboration infrastructure, which allows organizations to perform computations on sensitive information without exposing the underlying data itself.
The company’s platform addresses a fundamental challenge in data sharing: enabling multiple parties to work with confidential information while maintaining privacy and security. TACEO’s approach centers on what it calls “Private Shared State” powered by a cryptographic innovation known as coSNARKs that combines Multiparty Computation (MPC) with Zero-Knowledge Proofs (ZK).
Cryptographic Innovation Meets Real-World Applications
Founded in 2022 by cryptography researchers from Graz University of Technology, TACEO has already demonstrated the commercial viability of its technology through significant partnerships. The team previously developed the widely adopted Poseidon hash function and created a privacy-focused COVID-19 contact tracing system.
The startup’s most notable deployment involved partnering with World, formerly known as Worldcoin, to build iris verification software for over 14 million users. This project represents the largest known implementation of MPC-secured data, keeping biometric information fully encrypted even from World itself.
“We’ve deployed TACEO to build one of the largest privacy preserving systems in the world,” said Philipp Sippl, board member of World.
Market Applications Beyond Blockchain
While the technology has clear applications in decentralized finance, TACEO’s platform extends into broader sectors where data confidentiality remains critical. The company points to artificial intelligence as a particularly promising area, where Large Language Models and autonomous agents could verify information and make decisions without accessing personal or proprietary data.
In the financial sector, the platform could enable payment providers to verify transactions and demonstrate compliance while keeping sensitive data encrypted. This addresses a persistent challenge in decentralized finance, where stablecoins have reached a market value exceeding $250 billion this year, yet institutions must choose between transparency on public blockchains or building isolated custom systems.
Strategic Investment and Accelerator Support
Archetype VC led the funding round, with participation from a16z CSX, Cyber.Fund, A.Capital Ventures, Polymorphic, and several angel investors. The investment follows TACEO’s selection for the a16z CSX accelerator program in 2024, further validating its technology approach.
“TACEO is at the forefront of building programmable privacy into the Web3 compute stack” said Ash Egan, Founder and General Partner at Archetype.
CEO and cofounder Lukas Helminger emphasized the urgency of solving privacy challenges in an era of increasing AI capabilities.
“The ability to instantly verify encrypted information without revealing the data is no longer a nice-to-have – it’s essential if we want to achieve transparency, fairness, and control in the AI era” ~ Lukas Helminger.
Scaling Beyond Crypto Applications
The new capital will support team expansion and technology scaling efforts, with plans to extend beyond cryptocurrency and decentralized finance into identity verification, financial services, and artificial intelligence applications. The company’s approach could potentially resolve long-standing tensions between data collaboration needs and privacy requirements across multiple industries.
TACEO’s technology represents a shift from traditional approaches that require either complete data exposure or centralized trust models. By enabling computation on encrypted data while providing verifiable results, the platform could influence how organizations handle sensitive information across various sectors where privacy and collaboration have historically been mutually exclusive requirements.