Tether has joined an $8 million strategic funding round for Abu Dhabi–regulated tokenization firm KAIO, backing the startup as it builds infrastructure to move traditional institutional funds onto blockchain rails.
The investment—which brings KAIO’s total capital raised to $19 million—includes new backer Systemic Ventures and repeat investors Further Ventures and Laser Digital, alongside earlier supporters such as Brevan Howard Digital. Tether’s participation ties KAIO’s model to stablecoin liquidity, a key vector for cross-border capital flows.
What KAIO does
KAIO develops tokenization infrastructure that lets asset managers issue onchain versions of traditional fund products. The firm already has created tokens for offerings from the likes of BlackRock, Brevan Howard and Hamilton Lane and makes those tokens accessible through blockchain-based distribution systems. To date KAIO says it has tokenized roughly $100 million in assets and processed more than $500 million in transactions.
Growth plans and product roadmap
With the new funding, KAIO plans to expand beyond tokenized private funds into credit products, structured investments and exchange-traded funds. It also announced plans to launch an onchain fund with Mubadala Capital—the Abu Dhabi-based private equity firm that manages roughly $385 billion in assets.
Lowering barriers to institutional investing
A central goal for KAIO is to reduce minimum investment thresholds: the firm targets eligible investors with entry points starting at about $100, a dramatic reduction from typical institutional fund minimums. KAIO says its platform embeds compliance features and supports regulated distribution frameworks in jurisdictions including Abu Dhabi, the Cayman Islands and Singapore.
Why Tether matters
Tether’s involvement links KAIO’s offering to stablecoin rails—USDT remains the largest stablecoin with roughly $185 billion in supply—and could make it easier to channel stablecoin liquidity into regulated investment products. “KAIO’s unique position unlocks new pathways for capital formation and investment by bringing institutional-grade assets onchain and making them more broadly accessible, helping expand participation in global financial markets,” Tether CEO Paolo Ardoino said.
Why it matters
The deal underscores growing momentum in tokenization: regulated issuers and stablecoin liquidity are converging to lower friction for cross-border and retail access to institutional assets. If KAIO can scale its compliance-focused tokenization infrastructure, the model could broaden access to funds that historically have been limited to large, accredited investors.
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