Solana Startup Arcium Acquires Web2 Competitor Inpher

Solana-based (SOL) confidential computing startup Arcium has acquired Inpher, a competitor in the Web2 space, exclusively revealed to Lightspeed. This acquisition means Arcium will absorb Inpher’s core team and technology, although the terms remain undisclosed. This move follows recent activity in the crypto M&A space, including Stripe’s acquisition of Bridge, which has sparked hopes of more deals in the industry.

Originally known as Elusiv, Arcium started as a Solana privacy protocol before shifting its focus to confidential computing. In May, the startup announced a $5.5 million funding round led by Greenfield Capital to support the development of fully confidential applications on the blockchain. However, Arcium has not yet officially launched.

When I recently met with Arcium's CEO, Yannik Schrade, at a coffee shop in Manhattan, he emphasized the importance of confidential computing. “Would you share your social security number with me? No?” he joked. Schrade explained that sensitive data on the internet is often encrypted, but decrypting it for processing can create a “single point of failure,” leaving it vulnerable to breaches. He pointed to potential applications like collaborative AI training, which could benefit from confidential computing to protect against data leaks.

Schrade praised Inpher’s team as a “research-driven powerhouse” with a strong background in cryptography. “Now we have a significant number of PhDs in the Solana ecosystem,” he added. Inpher, backed by investors like JPMorgan and the Amazon Alexa Fund, raised $14 million since its founding in 2016, per Crunchbase. Recently, Inpher focused on providing secure and private AI interactions.

In confidential computing, confidentiality is crucial, allowing multiple parties to collaborate or transact without needing to trust each other. Yet, certain advanced applications, such as zero-knowledge proofs—which verify information without revealing it—are still largely theoretical.

Schrade, with a nicotine pouch tucked in his lip, explained Arcium’s approach: “We’re not just producing academic research that may never see practical use. Instead, we’re building real technology and practical research with user-friendly interfaces that developers can use without needing to learn new concepts.”