Decentralized AI infrastructure startup Kite AI has secured $18 million in a Series A funding round led by PayPal Ventures, bringing its total funding to $33 million. The round saw participation from a notable consortium of investors including Samsung Next, SBI US Gateway Fund, 8VC, Vertex Ventures, Hashed, HashKey Capital, Avalanche Foundation, LayerZero, and Animoca Brands.
The funding will accelerate the development of Kite's AI-centric layer-1 blockchain, built on Avalanche (AVAX), which launched its testnet in February. The blockchain is specifically designed to handle AI workflows with enhanced scalability, data coordination, and programmable identity layers. Kite's core product, AIR (Agent Identity and Resources), consists of two main components: an Agent Passport for cryptographic identity and trust chains, and an Agent App Store offering services, APIs, and data sources for AI agents.
Stablecoins serve as the settlement layer, enabling millisecond-level payments for microtransactions conducted by autonomous agents. Kite is already piloting integrations with PayPal and Shopify merchants, allowing AI shopping agents to discover and transact directly with these platforms. PayPal Ventures partner Alan Du emphasized that Kite addresses a critical payments gap for autonomous AI, calling it "the first real infrastructure purpose-built for the agentic economy."
The investment highlights growing institutional belief in AI agents as the next major user class in Web3, capable of autonomous decision-making and transactions at machine speed. However, scaling beyond pilot programs and achieving widespread developer adoption remain key challenges.