Agora Raises $50 Million for Stablecoin Expansion

Agora, a stablecoin startup, has successfully raised $50 million in a Series A funding round led by Paradigm, a prominent blockchain-focused venture capital firm. This investment follows a $12 million seed round from the previous year, highlighting the growing interest in stablecoins within the crypto industry. Agora was co-founded by Nick van Eck, son of investment management CEO Jan van Eck, along with crypto veterans Drake Evans and Joe McGrady. The company aims to build AUSD, its own stablecoin pegged to the U.S. dollar, and offers a white-labeling service that allows other companies to launch their own branded versions of AUSD, leveraging its interoperability and liquidity.

Agora's business model differs from its competitors, Tether and Circle, by focusing on helping other companies launch their own stablecoins. This approach is similar to that of Paxos, which collaborated with PayPal to launch PYUSD. However, Agora's model ensures that any company working with it will launch its stablecoin on top of AUSD, reinforcing its own competitive advantage and benefiting from broader network effects. Agora has already collaborated with crypto companies like Polygon to launch bespoke stablecoins for decentralized finance projects and expects to work with non-blockchain companies in the future.

The regulatory landscape for stablecoins in the U.S. has been uncertain, but recent legislative developments, such as the Senate passing a bill in June, could provide clearer guidelines. Agora has been acquiring state money transmitter licenses and expects to start serving U.S. entities if the legislation is enacted. However, the company's focus remains on international markets, where there is higher demand for stablecoins due to currency volatility and the need for cross-border payments. Nick van Eck noted that financial institutions outside the U.S. are more aggressive in adopting stablecoins compared to their U.S. counterparts.

Agora's stablecoin is designed to share the yield of the dollar-like assets backing it with its partners, aligning with the company's belief that stablecoins should be run like public goods. The company works with State Street and VanEck, the investment firm run by Nick van Eck's father, to manage its reserves. The Series A funding round was primarily led by Paradigm, with seed investor Dragonfly also participating. Paradigm's general partner, Charlie Noyes, described Agora's product as a "batteries-included stablecoin" that allows companies to quickly create their own versions without extensive engineering resources. Despite the competitive landscape, Noyes believes that Agora's combination of white-label service, interoperability, and revenue sharing will make it an attractive option for companies exploring the stablecoin space.