With two rounds of financing in a year, why is Agora's Growth Logic Capital willing to pay?
Written by ChandlerZ, Foresight News
On July 10, stablecoin company Agora announced the completion of a $50 million Series A funding round led by crypto venture capital firm Paradigm, with continued participation from early investors such as Dragonfly. The round comes just a year after its seed round, which closes in 2024, when it raised $12 million from investors including Foresight Ventures, Hack VC, Galaxy Digital, and others.
Currently, the stablecoin market is dominated by leading projects such as Tether and Circle, and Agora is still in its early stages, with a circulating market capitalization of around $160 million for its core product, AUSD. Despite the concentration of the industry structure and the gradual clarification of the regulatory environment, the company's proposed issuance model still attracts the attention of capital. For institutions, in addition to factors such as product availability and service stability, whether there is a new way to enter stablecoins has also become one of the key factors in the evaluation.
About Agora
Founded in 2023 and headquartered in the United States, Agora focuses on providing stablecoin-related infrastructure. The first product, AUSD, is minted on a 1:1 basis, with cash, short-term U.S. Treasuries and overnight repo agreements as reserve assets. The company's service targets are enterprises and institutions, providing stablecoin issuance, clearing and custody capabilities, and are not directly oriented to end users.
In terms of product strategy, Agora has established an AUSD-based issuance framework, based on which partners can issue their own branded stablecoins. This approach avoids dependence on the Agora brand, allowing partners to maintain revenue distribution and operational dominance. Technically, AUSD can be deployed to mainstream chains such as Ethereum and Solana, and the contract layer can be extended with a variety of functions, including permission control, signature verification, and privacy transmission.
At the service application layer, Agora provides an exchange channel between AUSD and mainstream stablecoins (USDC, USDT), and opens a round-the-clock liquidity interface for some institutional customers. Up to now, AUSD has more than 8 million on-chain transactions, with a cumulative transaction size of more than $12 billion, about 55,000 registered users, and more than 100 cooperative institutions. At present, the circulation is mainly on-chain, and the use is mainly concentrated in some decentralized trading platforms and payment scenarios.
From the perspective of market positioning, Agora is closer to the Paxos model, focusing on institutional cooperation orientation. However, unlike Paxos, which issues independent stablecoins for partners, Agora's partners' products are pegged to AUSD and share the underlying liquidity. This approach not only maintains brand independence, but also makes assets within the network interchangeable, which is conducive to liquidity management and technology access.
Team background
Agora was co-founded by Nick van Eck, Drake Evans, and Joe McGrady, who serve as Chief Executive Officer (CEO), Chief Technology Officer (CTO), and Chief Operating Officer (COO), respectively. According to public information, the current number of the company's team is less than 10 people.
Nick van Eck is a former partner at General Catalyst with a long-standing focus on investment opportunities in enterprise software and crypto, and previously worked at JMI Equity where he worked on several large deals and graduated from the University of Virginia.
Drake Evans is responsible for technical architecture and contract development, and participated in the construction of Frax Finance-related modules in the early years, including projects such as Fraxlend, Fraxswap and frxETH, with peak contract assets under management exceeding $1 billion. He has worked in the ADP team to optimize the performance of payment systems and has experience in the development of relevant compliance systems.
Prior to joining Agora, Joe McGrady was the head of global operations at Galaxy Digital, where he was involved in the organization of trading, lending, asset management, and infrastructure, as well as the integration process for projects such as Fireblocks. He has held key positions at Ospraie Management and its spin-off, ParkRiver, where he has long been engaged in institutional due diligence and operations management.
On the whole, the team members' backgrounds span venture capital, blockchain protocol development and traditional financial operations, and they have the basic conditions to promote institutional-grade products.
Product layout: three main line strategies
Agora currently builds a service system with three product lines, covering stablecoin issuance, liquidity management, and multi-chain network deployment, in an attempt to address the core issues of compliance and transparency, fund scheduling, and cross-chain use in the current stablecoin application.
The first product line is the AUSD stablecoin itself, which is dominated by short-term U.S. bonds and cash, and is supervised by a third-party custodian, with certain transparent disclosure and audit arrangements. This asset structure can meet the regulatory requirements for stablecoin products in some regions and reduce the credit risk caused by the opacity of reserve assets.
The second product line is the "Instant Liquidity" service. Agora has built an exchange mechanism with stablecoins such as USDC and USDT, so that institutional users can complete asset conversion on multiple chains with low latency. This feature is provided through the Atlas interface, with the goal of reducing the friction caused by liquidity stratification while improving the capital efficiency of cross-chain assets.
The third product line is a stablecoin issuance network and a white label platform. Agora supports multi-chain deployment and bridges partner products to centralized and decentralized exchanges. Enterprise customers can issue localized stablecoins according to their own needs, and the system provides corresponding clearing, custody and brand support capabilities. This platform-based structure enhances the autonomy of partners and enhances the adaptability and collaboration of the overall network.
brief summary
In the context of the gradual maturity of the stablecoin market and the increasingly differentiated user needs, capital has begun to pay attention to the adjustment space of product models and service boundaries. The cooperative issuance structure adopted by Agora focuses on enterprise users and institutional scenarios, and the landing point is relatively clear, reducing the direct intersection with the top projects in the terminal market.
The current financing also shows that the capital market is still interested in exploring this type of model, especially in the context of the gradual formation of the policy framework, institutions are more inclined to focus on projects with compliance adaptability and expansion potential. For the stablecoin industry, Agora's attempt provides a possible path that takes into account both standardization and customization, and the institution-oriented approach and relying on the underlying network may become a reference sample for the future development of stablecoins.