Kite AI just secured $18 million in Series A funding, led by PayPal Ventures — pushing its total funding to $33 million. The goal behind this raise is simple but ambitious: build decentralized infrastructure where AI agents can live, think, transact, and operate directly on Web3 rails.
This round brought in a strong list of backers, including Samsung Next, SBI US Gateway Fund, 8VC, Vertex Ventures, Hashed, HashKey Capital, Avalanche Foundation, LayerZero, Animoca Brands, and several others. Earlier this year, Kite rolled out the testnet of its AI-focused Layer-1 chain built on Avalanche, designed to support fast data processing and coordinated AI operations at scale.
A New Kind of Web3 User: AI Agents
Kite’s vision revolves around a simple idea — AI agents will eventually become active “users” in the Web3 ecosystem. These agents are autonomous programs that observe their environment, make decisions, and act without human supervision. To support this new user category, Kite is building the infrastructure they need to operate safely.
The team introduced AIR, a system that allows these AI agents to hold identities, authenticate themselves, and complete transactions. AIR includes two main modules:
Agent Passport — a digital identity layer that creates a trust chain by giving users, agents, and sessions their own cryptographic IDs.
Agent App Store — a marketplace where AI agents can access data, services, and tools, and even pay for them using native stablecoins.
Kite says this layered identity system helps trace every action back to its source, creating a secure environment where agents can interact at machine speed without compromising trust.
Why PayPal Ventures Backed Kit
Kite’s co-founder, Chi Zhang, believes autonomous agents will become the main interface for future digital economies. But current financial systems weren’t built for this kind of activity — especially when machines are executing micro-transactions nonstop.
He explains that AI agents need three things to function properly:
Reliable and structured data
A trust-based identity system
Payments built for speed, scale, and autonomy
With Kite’s infrastructure, businesses like PayPal or Shopify merchants could eventually make their catalogs discoverable to shopping agents, enabling automated purchasing flows. All transactions settle on-chain using stablecoins, ensuring transparency and speed.
Alan Du from PayPal Ventures described Kite as “the first real infrastructure built for the agentic economy,” highlighting that payments remain a major challenge in AI systems — and Kite solves this with millisecond-level stablecoin settlement.
PayPal’s digital assets team echoed this sentiment, saying the system creates a space where humans, enterprises, and machines can interact seamlessly.
AI Agents Are Becoming a Big Trend
Interest in AI-run systems is growing fast across Web3. Teams inside Coinbase recently predicted that AI agents may soon become Ethereum’s “biggest power users.”
But because agents operate so differently from humans, the industry is now building specialized tools that can help them interact with blockchains, execute complex tasks, and work across protocols.
Some developers argue that intent-based blockchains — systems that understand the goals behind a transaction — will be essential for AI agents to function at scale.
We’re already seeing early examples.
One of the most active AI-agent DApps today is Clanker, which lets AI create memecoins based on simple user prompts. It has generated over $34 million in fees — showing how quickly agent-driven systems can take off.
Kite AI’s latest funding round suggests we’re still at the very beginning of this shift. As decentralized AI continues merging with onchain finance, autonomous agents may become the next major wave shaping how Web3 actually works.
