Our Investment in Kado

We are excited to announce that Race Capital has invested in Kado, a payments infrastructure company focused on UST and stablecoins, in its $5.4 million seed round partnering with Emery Andrew, Vince Dowdle and the Kado team.

Kado is building the core payment infrastructure for Web3 starting with UST stablecoins. It offers a simple on-ramp process to exchange from UST to fiat (Kado Ramp), as well as an e-commerce platform to make purchases with the UST stablecoin (Kado Pay), and up next is the ability to earn passive interest on on-ramped UST (Kado Save).

The three main things that got us really excited about Kado was the product, traction, and overall market opportunity.

Best in Class User Experience and Confirmation Times

We did numerous on-ramps payment testing including MoonPay, Ramp Network, Kado, and many others. Kado by far has the best product flow, fastest transactions time with less than 3 minutes, and the smoothest overall experience.

There are 2 main ways to on-ramp from fiat to crypto: 1) Centralized exchanges such as FTX or Coinbase 2) On-ramp solutions such as Kado or MoonPay.

The main challenges with going through centralized exchanges are withdrawal limitations, non-native Web3 experience, and finally from a UX standpoint if you want to do things with your stablecoins assets it’s better to on-ramp directly into a wallet (less steps needed).

In addition to just the on-ramp portion Kado also allows users the ability to spend their assets once onboarded, saving via DeFi products is coming next, and merchant accounts are coming soon afterwards.

Early strong traction

In the company’s first week, it processed over $1 million in UST purchases and has been increasing about $100,000 a day since, with users from over 60 countries. Most importantly user feedback has been strong with many commenting they will never have to use a centralized exchange any longer and can directly use Kado for their needs going forward.

In addition to the user side, Kado has built up a substantial group of early partners including: Terra, Prime Trust, Circle, Solana, Phantom, and many others.

Large untapped $744 billion market

According to J.P. Morgan, the eCommerce market is valued at $744 billion today, and we fundamentally believe that stablecoins will materially eat into this market.

We are in the earliest days of viewing stablecoins as new payment rails and with the recent launch of Solana Pay, we believe this will be a huge mega trend across multi-layer one protocols trying to capture this market. Through ecosystems like Terra and Solana using Kado as the underlying payments infrastructure, we can hopefully make payments far more efficiently, cheaper, and faster for everyone!

We love that Emery and Vince have a very strong and holistic view of the payment infrastructure landscape across both the Terra ecosystem and the newly emerging Solana payments products 👀.

We look forward to the partnership and for Kado to define the future of payments infrastructure.