Peak XV and Hongshan, the Indo-Chinese investment firms that spun off from giant Sequoia last year, have pledged $10 million to KAST, a dollar-denominated neobank-like platform that allows customers to hold and spend stablecoins through traditional payment methods. Co-led the seed investment. .
Kast also issues credit cards that work with standard merchant networks, allowing users to use their stablecoin holdings even with merchants that do not support cryptocurrency transactions.
The startup is targeting emerging markets where access to the US dollar is limited and remittance costs are high. Although KAST does not operate in India or China due to regulatory constraints, it serves a large offshore workforce in these markets.
Co-founder Raagulan Pathy, who previously ran Circle's Asia-Pacific operations, told TechCrunch that banking infrastructure in many countries is severely lacking in cross-border capabilities. The platform aims to reduce friction in international payments by bypassing traditional banking networks.
The launch of KAST comes at a time when stablecoin adoption is rapidly increasing. More than 20 million people around the world use stablecoins every month, many of them concentrated in emerging markets. Stripe's $1.1 billion acquisition of stablecoin infrastructure provider Bridge in October further demonstrates mainstream companies' growing interest in the technology.
The startup faces competition from both crypto-native companies and traditional fintech companies moving into stablecoins. PayPal launched its own dollar-pegged token, and Revolut and Ripple announced plans to issue stablecoins. The sector is also highly concentrated, with Tether controlling around three-quarters of the supply.
Daniel Bertolli, another co-founder of KAST and former partner at Quona Capital, said existing neobanks have struggled to integrate blockchain because their core systems were not designed for cryptocurrencies. claim. “The next generation of digital banks will be global in nature and built on stablecoins from the ground up,” he said.
Partners DST Global and Goodwater Capital also invested in the round. KAST declined to disclose the number of users or its valuation, but said growth in the first four months of operation has exceeded expectations.
The startup plans to launch savings products and expand remittance services, with a focus on stablecoin-based infrastructure.
Because KAST operates solely on stablecoins, it also offers customers “a safe haven for their hard-earned income when the local currency depreciates,” said the co-founder and CEO of analytics platform Nansen.ai. said Alex Svanevik, Executive Director and early supporter of KAST. .
“More digital nomads can now bypass the hassles of traditional rails by receiving their paychecks in stablecoins. International money transfers that once took weeks are now virtually free. It can now be completed in an instant,” he said in a statement.
This is the first joint agreement for Peak XV and HongShan since their separation from Sequoia in June 2023. Both companies are increasingly operating beyond traditional geographic boundaries, with HongShan expanding into Europe and North Asia to deploy its $9 billion capital pool. Peak XV establishes presence in the US
TechCrunch reported late last month that Sequoia, the company's former parent company, was in advanced discussions to back fintech Vance. If the deal goes through, it will be the company's first investment in India since the separation.