Stablecoin startup Payy has raised $6 million in a seed funding round as it is building a privacy-focused payments network using zero-knowledge technology.

The round was led by FirstMark Capital, an early backer of Airbnb, Shopify, and Pinterest, and included participation from Robot Ventures and DBA Crypto, Payy said Wednesday.

"We were preempted by FirstMark," Payy co-founder and CEO Sid Gandhi told The Block, noting that the round closed in December. The round was structured as a simple agreement for future equity (SAFE) with token warrants, Gandhi said, declining to disclose the startup's valuation.

The seed round brings Payy's total funding to $8 million, including a $2 million pre-seed round raised under its former identity, Polybase, Gandhi said.

Payy was originally founded as Polybase, a web3 database project, before pivoting in 2023 toward stablecoin payments. Gandhi said the shift was driven by the realization that the zero-knowledge technology built for its database could address what he sees as a key limitation in stablecoins — the lack of privacy.

"Today, sending a stablecoin payment is like posting your bank statement on a public website. Every amount, every recipient, every balance, visible to anyone," Gandhi said. "Enterprises will never move meaningful payment flows onchain if every transaction is visible to the world."

Payy aims to solve this by enabling private transactions by default. The startup offers a self-custodial wallet and a Visa card that allows users to spend USDC anywhere Visa is accepted while keeping onchain transactions private. It is also developing the Payy Network, an Ethereum Layer 2 rollup that uses zero-knowledge proofs to shield transaction details such as sender, receiver, and amounts.

The Payy wallet launched in January 2024, followed by the Visa card in August 2025. The company announced the Payy Network last month. Gandhi said a testnet is expected to launch next month, with a mainnet rollout planned for this summer. A native token is also planned, though no timeline has been set, he added.

Payy said its platform is used by more than 100,000 users across 120 countries and processes around $130 million in annualized transaction volume.

The startup is now targeting enterprise customers, including financial institutions and fintech platforms, looking to integrate stablecoin payments without exposing sensitive transaction data.

"We have a dozen design partners starting to build on our testnet to add privacy to billions of dollars of stablecoin flows," Gandhi said. "With the FirstMark investment, we have access to some of the best technology-forward companies on the planet, who we plan to onboard to stablecoins in the coming months."

Payy is based in New York and has a team of 12 people, with plans to hire across business development and engineering roles, Gandhi said. The company generates revenue through onramping fees, gas fees, and enterprise contracts, he added.

The Funding newsletter:  Stay on top of the latest crypto VC funding and M&A deals, news, and trends with my free bi-monthly newsletter, The Funding. Sign up here!