Payy Secures $6 Million Seed Funding for Private Stablecoin Payments Using Zero-Knowledge Technology

Payy, a startup focusing on privacy-centric stablecoin payments, has raised $6 million in seed funding, led by FirstMark Capital. The funds will be used to develop a zero-knowledge Layer 2 network and wallet to ensure USDC payments are private by default, appealing to enterprises seeking to avoid transparent blockchain transactions.

Key Takeaways

Payy raised $6 million in seed funding to enhance privacy in stablecoin payments.
The funding round was led by FirstMark Capital with additional participation from Robot Ventures and DBA Crypto.
Payy aims to address concerns over transaction transparency on public blockchains, particularly for enterprises.
The company transitioned from a web3 database project, Polybase, to focus on stablecoin transactions.
Payy's upcoming Payy Network will utilize zero-knowledge proofs to secure transaction details.
The platform currently processes $130 million annually for over 100,000 users globally.

Payy zero-knowledge stablecoin payments network illustration

Main Content

Payy, a startup specializing in privacy-focused stablecoin transactions, has successfully raised $6 million in seed funding, with FirstMark Capital at the helm of the investment. This round also saw contributions from Robot Ventures and DBA Crypto, and according to reports from The Block, it was finalized in December 2025. This funding was structured as a simple agreement for future equity (SAFE) accompanied by token warrants, which has helped elevate Payy’s total capital raised to $8 million, including $2 million collected during its pre-seed phase under the name Polybase.

Co-founder and CEO Sid Gandhi mentioned that FirstMark approached them for investment. The primary argument from Payy, echoed by various stablecoin developers, is that the overt transparency of on-chain payments deters significant enterprise engagement. “Today, sending a stablecoin payment is like posting your bank statement on a public website,” Gandhi stated. “Every amount, every recipient, every balance is visible to anyone. If every transaction is public, enterprises will hesitate to transition substantial payment flows on-chain.” A previous opinion piece noted that without privacy, stablecoins might lack competitiveness.

Originally, Payy was created as Polybase, a web3 database initiative, before shifting its focus to stablecoin transactions in 2023. Gandhi recognized that the zero-knowledge technology implemented for the database could effectively fill what he believes is a critical gap in stablecoin operations. The company has since developed a self-custodial wallet, launched in January 2024, and a Visa card, which became available in August 2025. These offerings allow users to spend USDC wherever Visa is accepted while maintaining the confidentiality of their on-chain activities.

In the longer term, Payy aims to establish the Payy Network, an Ethereum Layer 2 rollup that employs zero-knowledge proofs to protect transaction details like sender, receiver, and amounts. The company made this announcement last month, with a testnet expected to launch in the upcoming month and plans for a mainnet release within the summer. A native token is also in the pipeline, although Gandhi did not specify a launch timeline. Previously, a story by crypto.news detailed how Aleo’s zero-knowledge foundation is pursuing a similar approach to private stablecoin transfers with selective regulatory disclosure, indicating an increasingly competitive marketplace for this kind of technology.

Based in New York, Payy currently employs a team of 12 and has plans to expand in both business development and engineering roles. The platform has already gained over 100,000 users across 120 countries, processing an estimated $130 million in annual transaction volume. Revenue is generated through on-ramping fees, gas fees, and contracts with enterprises.

According to Gandhi, around a dozen design partners are already utilizing the testnet to incorporate privacy features into their stablecoin transactions totaling “billions of dollars.” He also highlighted the value of the FirstMark investment, viewing it as a pathway to connect with leading technology-driven companies who they plan to introduce to stablecoins in the near future. Payy is part of a wider trend of stablecoin infrastructure startups receiving institutional investments, similar to Gnosis, which entered the U.S. market through a partnership with stablecoin startup Noah after securing $22 million in seed funding.