Aztec Network takes on encrypted blockchains with $100 million round led by a16z • TechCrunch

Aztec Network, a web3 privacy team, has raised $100 million in a Series B round led by Andreessen Horowitz (a16z), the startup’s co-founders Zac Williamson and Joe Andrews told TechCrunch exclusively.

“At a high level, Aztec is an encrypted version of Ethereum,” Andrews said. “Normally on Ethereum everything is public, but we do it encrypted. That journey has taken us many years to play out.”

Aztec Network launched Aztec Connect, an ecosystem that integrates with Ethereum DeFi protocols such as Aave, Lido and Element Finance, in July 2021. In the future, it will integrate with Compound, and five other DeFi protocols, according to the website.

Encrypted blockchains provide transparency for the protocol but privacy for users, so people aren’t required to show their identity when they shop, Williamson said.

“The world is not a nice one to live in without encryption,” Andrews said. “Go through your day and think about how many things you don’t want people to see. Not everything is bad; it’s just your everyday life. But think about how you take it for granted. Doing things without privacy would be a pretty scary world and not a world we want.”

Aztec co-founders Joe Andrews and Zac Williamson Image credit: Aztec (opens in new window)

Apart from a16z, there were “some large funds and new investors” in the round, but Andrews did not disclose their names.

“We chose [a16z] to lead the round because they’ve been through this before with the dawn of the internet,” Andrews said. “It is a similar situation that we find ourselves in; yes, different but same problem. We have this exciting new technology and the opportunity to transform the lives of everyone in the world, but we need encryption to make it a reality.”

The capital will mainly be used to hire more engineers globally to build the network, Andrews said. In the past year, the Aztec team has expanded from seven people to about 40, but they hope to double that number in the short term, he added.

In general, public blockchains lack a “missing piece” of encryption, which could enable more use cases by providing case-by-case privacy, Andrews said. Adding encryption to blockchain technology could, among other things, “create a whole wave of personal consumer finance,” he said.

While there are several encrypted blockchains such as Zcash and the Iron Fish network, Aztec differs from them because it is programmable, Williamson said. “They are a bit like Bitcoin – what you can do with these networks is determined by the people who created it.”

Until recently, the technology for programmable encrypted blockchains did not exist, Williamson said. “One of the reasons we were able to raise $100 million is because our internal research and development made it a reality.”

The network is aiming for a test net launch within 12 months, but they hope it will be fully deployed on the main net within 8 to 24 months, Williamson said. Aztec Connect will be brought to the network as its first application, Williamson added.

In the long term, the network wants to create a system where people can trade and coordinate with the level of encryption needed for mainstream blockchain adoption, Andrews said.

“The goal is to make blockchains encrypted and use them to disrupt the traditional financial services industry to its core,” Williamson said. “If we succeed, the banks will have a lot of sleepless nights in two to five years.”