Inco Raises $5M in Strategic Round Led by a16z CSX to Accelerate Web3 Confidentiality, Launches Inco Lightning on Base Sepolia

Inco, the project building the missing confidentiality layer for the blockchain stack, today announced a $5 million funding round led by Andreessen Horowitz Crypto Startup Accelerator (a16z CSX). The raise welcomes new investor Coinbase Ventures and sees follow-on support from existing investors 1kx Capital, OrangeDAO, South Park Commons, and Script Capital. This round brings Inco's total funding to $10 million. 

Inco is leveraging various cryptographic techniques to build a confidential compute protocol for existing blockchains. Their first product, Inco Lightning, is designed to provide confidentiality to any onchain application. Powered by verifiable compute within a Trusted Execution Environment (TEE), Inco Lightning offers confidentiality without compromising on the performance demanded by areas like real-time gaming, high-frequency DeFi, and private transactions. Inco aims to support multiple L1 and L2 blockchains in the future, starting with Ethereum and Base before expanding to other ecosystems.

"After solving issues like scalability and chain abstraction, confidentiality remains the final challenge for blockchains," said Remi Gai, Founder of Inco. “Just as SSL/TLS transformed the internet by making secure and encrypted communication the standard, Inco introduces a new paradigm of confidentiality for blockchains, empowering applications to embed privacy directly into business logic, risk management, and compliance. Incorporating privacy as a separate modular layer preserves the performance of the base protocol while allowing cryptographic techniques to be upgraded independently over time without disruption.”

According to recent research by Paradigm, a lack of privacy remains one of the top three challenges holding TradFi firms back from entering decentralized finance—despite the fact that two-thirds of them are actively interested in entering the space. Inco intends to solve this by enabling confidential stablecoin payments and maintaining composability, which will empower the creation of a new private DeFi ecosystem on top of the new confidential token primitive, including lending and trading.

Inco Lightning serves as the initial product offering, focusing on speed and latency-sensitive applications via TEEs. Inco's broader vision includes providing an additional, distinct solution leveraging Fully Homomorphic Encryption (FHE) to offer programmable onchain confidentiality in a trustless manner, which is slated for launch later this year. 

Inco has achieved significant momentum since its previous seed round in February 2024 through multiple accomplishments, including:

• Collaborating with Circle Research to outline a Confidential ERC20 token standard for compliant privacy.

• Founding the Confidential Token Association alongside OpenZeppelin and Zama to establish industry-wide standards for confidential tokens.

• Joining the ERC3643 Association and implementing a confidential version of the standard to enhance Real World Assets (RWAs) with confidentiality and compliance features.

• Securing strategic partnerships with Tally, Blocklive, and Toku to empower use cases like confidential onchain voting, private event ticketing, and secure payroll solutions.