Dayton’s Niobium secures $23 million to scale quantum-resilient encryption hardware

In the high-stakes race to secure the data economy against the looming capabilities of quantum computing and the privacy risks of generative AI, a Dayton-based semiconductor startup has emerged as a critical infrastructure player.

Niobium, a developer of custom silicon designed to power fully homomorphic encryption (FHE), announced it has closed an oversubscribed follow-on investment totaling more than $23 million.

The financing signals a maturing market conviction that software-based encryption alone cannot sustain the processing demands of the AI era. Niobium is betting that specialized hardware is the only way to make FHE—often described as the "holy grail" of cryptography because it allows data to be processed while remaining encrypted—commercially viable at scale.

The Details

• The Company: Niobium (Dayton, OH)

• The Funding: $23 million-plus oversubscribed follow-on to its seed round.

• The Mission: Developing proprietary semiconductor chips that accelerate Fully Homomorphic Encryption (FHE), a privacy technology that allows computation on data while it remains encrypted.

• The Backers:

  • New Investors: Blockchange Ventures (Strategic), ADVentures (corporate venture arm of Analog Devices, Inc.), Korea Development Bank (KDB), JobsOhio Ventures, Rev1 Angels, and Silicon Catalyst Ventures.

  • Returning Investors: Fusion Fund, Morgan Creek Capital, Rev1 Ventures, and Ohio Innovation Fund.

• Key Executive: Kevin Yoder, CEO

• Use of Funds: The capital will drive the development of second-generation FHE platforms, finalize production silicon architecture, and support the transition from prototype to commercial pilots.**

"The rise of AI, quantum computing, and distributed computing has expanded possibilities and risks in the data economy," said Kevin Yoder, CEO of Niobium. "Niobium is building the hardware foundation for the encrypted future."

Why it matters

As organizations rush to integrate Large Language Models (LLMs) and distributed blockchain networks, they face a paradox: to use data, they typically must decrypt it, exposing it to theft or misuse.

FHE solves this by enabling computation on encrypted data, providing a mathematical guarantee of privacy. However, FHE is computationally intensive, often running thousands of times slower than standard processing on general-purpose chips.

Niobium’s hardware accelerator is designed to eliminate that bottleneck. With 70 percent of the new capital coming from first-time investors, the round underscores the industry's hunger for a hardware solution that makes "Zero Trust" computing feasible for real-world workloads.

The Ohio perspective

While Niobium maintains offices in Portland, Oregon, and San Francisco, its headquarters remains in Dayton, reinforcing Ohio’s growing status in the national semiconductor conversation.

The inclusion of JobsOhio Ventures and continued support from Columbus-based Rev1 Ventures and the Ohio Innovation Fund highlights the state's strategy to capture the high-value design side of the chip industry, complementing the manufacturing capacity being built elsewhere in the region.

"Niobium exemplifies the kind of tech leadership we're proud to support in Ohio," said J.P. Nauseef, President and CEO of JobsOhio. "We're entering a new generation of AI, technology and manufacturing opportunities, and the investments we're already making in these industries are setting the stage for innovation."

What's next

Niobium plans to use the funds to finalize its production silicon architecture and deepen engagements with hyperscalers. The company is also expanding its Early Access Program to explore applications in federated learning and blockchain.