Peak XV and HongShan, the Indian and Chinese investment firms that split from powerhouse Sequoia last year, have co-led a $10 million seed investment in KAST, a dollar-denominated neobank-like platform that lets customers hold and spend stablecoins through traditional payment avenues.
Kast also issues credit cards that work with standard merchant networks, enabling users to spend their stablecoin holdings at merchants who don’t support crypto transactions.
The startup is targeting emerging markets, where access to USD is restricted and remittance costs are high. KAST does not operate in India or China due to regulatory constraints, but it serves the large offshore workforce from these markets.
Co-founder Raagulan Pathy, who previously ran Circle’s Asia Pacific operations, told TechCrunch that banking infrastructure in many countries severely lacks cross-border capabilities. The platform aims to reduce friction in making international payments by bypassing traditional banking networks.
KAST’s launch comes as stablecoin adoption sees rapid growth. More than 20 million people use stablecoins every month across the world, and much of that is concentrated in emerging markets. Stripe’s $1.1 billion acquisition of stablecoin infrastructure provider Bridge in October has further signaled growing mainstream corporate interest in the technology.
The startup faces competition from both crypto-native firms and traditional fintech companies expanding into stablecoins. PayPal has launched its own dollar-pegged token, while Revolut and Ripple have announced plans to issue stablecoins. The sector is also heavily concentrated, with Tether controlling roughly three-fourths of supply.
Daniel Bertoli, KAST’s other co-founder and a former partner at Quona Capital, argues that existing neobanks struggle with blockchain integration because their core systems were not designed for crypto. “The next generation of digital banks will be inherently global and built on stablecoins from the ground up,” he said.
Partners from DST Global and Goodwater Capital also invested in the round. KAST declined to disclose user numbers or its valuation, but said its growth had exceeded projections in its first four months of operation.
The startup plans to launch savings products and expand its remittance services while maintaining a focus on stablecoin-based infrastructure.
Because KAST only works with stablecoins, it also offers its customers “a safe haven for hard-earned income when local currencies decline,” said Alex Svanevik, co-founder and chief executive of analytics platform Nansen.ai and an early-backer of KAST.
“As more digital nomads receive salaries in stablecoins, they can now bypass the hassle of legacy rails. International transfers that once took weeks can now be completed instantly and at virtually no cost,” he said in a statement.
For Peak XV and HongShan, this is their first joint deal since they separated from Sequoia in June 2023. The firms are increasingly operating beyond their traditional geographic boundaries — HongShan has expanded into Europe and North Asia as it works to deploy its $9 billion pool of capital, while Peak XV has established a presence in the U.S.
Their former parent Sequoia is in advanced stages of deliberation to back fintech Vance, TechCrunch reported late last month. If the deal goes through, it would be the firm’s first investment in India since the separation.
