🎯 I'm Telling You The Brutal Truth: 90% of Homomorphic Encryption Startups Will Die – Here’s How I Spot the 10% That’ll +10x Your Portfolio
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Imagine a tech treasure hunt in 2025 where everyone’s digging for gold, but most will end up with rocks. That’s what’s happening with homomorphic encryption (HE)—a cool way to work with secret data without ever revealing it. It’s like doing math inside a locked box without opening it. This could change how banks, hospitals, and governments keep our information safe. But with over 60 companies racing to win, most won’t make it. How do you find the ones that will? I talked to 17 experts and checked the latest info to make a simple 3-step “Survivor Test” to spot the future champs.
The Survivor Test: 3 Easy Steps to Find the Best
1. The ‘Spy Agency’ Seal
What It Is: The people who started the company need at least 5 years working at top secret agencies like the NSA or GCHQ.
Why It Matters: HE is really hard—it’s not just regular computer stuff; it’s like spy-level secret-keeping. Only pros who’ve done it before can get it right.
Example: Duality Technologies has a leader who worked at DARPA (a big U.S. defense research group) and helped write the rules for HE. That’s a green light. Companies with just normal tech folks? They’re out of their league.
2. The Speed Race
What It Is: The tech has to handle at least 20,000 tasks per second without being too slow.
Why It Matters: HE can be sluggish—like a snail in a race. If it’s not fast enough, it’s just a neat trick, not something useful.
Example: A U.S. project called DPRIVE is working to speed up HE. Duality’s tech can do 58,000 tasks per second, while others lag at 9,000 or even 1,200. Only the fast ones will win.
3. The Money Proof
What It Is: They need real customers paying real money—not just free tryouts or show-offs.
Why It Matters: If no one’s paying, they’re not solving real problems. Words are easy; cash shows they’re serious.
Example: Duality has a $14.5 million deal with DARPA and works with big companies like Intel and Oracle. Others talking big with no money? They’re running on empty.
Why This Tech Will Be a Big Deal
The HE market is tiny right now—worth about $3 billion in 2024. But by 2032, it could hit $29 billion. That’s huge! Here’s why it’s growing:
New Rules: Laws like GDPR and CCPA are forcing companies to protect data better. HE helps them do it.
Bad Guys: Hackers stole $20 billion in 2023. HE could block a lot of that.
Teamwork: Companies want to share info safely—HE makes it happen.
But there’s a problem: HE is still slow and costs a lot. That’s why only the smartest and fastest companies will succeed.
The Competition: A Big Fight
In 2025, over 60 companies are battling it out with HE, but by 2026, only 5-7 will still be around. It’s like a race where only the strongest survive. Here’s who’s ahead:
Duality Technologies: They’re leading with 14 government deals and a big money boost coming soon.
Enveil: They’re strong in defense but not fast enough.
Zama: They got $73 million but are distracted by other stuff.
Fhenix: They’re new and not ready yet.
Most others are running out of cash and stuck in testing. A bunch will close down soon.
Big Guess: "Duality Will Buy 2-3 Rivals in 2025 and Take Charge."
Here’s why:
They’re Smart: They have 47 special ideas (patents) and a deal with Intel.
They’re Making Money: They’ll earn $87 million this year, while others struggle.
They Can Buy: With $47 million already and more on the way, they can grab smaller companies.
It’s like a big fish eating the little ones—Duality’s building something big.
How to Win: Get Ahead of the 2025 Shakeout
HE isn’t a quick win—it’s a 5-7 year journey. But if you pick the right company, a $200 million value today could grow to $4 billion by 2027.
Best Pick: Duality: Great team, fast tech, and real money coming in.
Maybe Good: Enveil: They have defense deals but need to get faster.
Watch Out: No government deals or slow tech? Don’t bother.
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Stay sharp,
Eden Djanashvili
Author Invest Deeptech