Feb 6, 2024 - Business

Micropayments startup Code raises $6.5 million

Illustration of a smartphone with a payphone coin slot, and a dime going into it.

Illustration: Brendan Lynch/Axios

Code, a crypto payments organization, has raised $6.5 million in a seed round.

Why it matters: Code has built an app to take on one of the internet's oldest dreams: micropayments, the ability to spend tiny amounts of value for digital goods (like access to blog posts, live streams or digital art).

  • The round was co-led by M13 and Union Square Ventures, with a variety of noteworthy individual investors.

What they're saying: "We believe the timing could not be better. There is more creative output around the world than ever before," Code said in a statement shared with Axios.

Zoom in: A few times each year, internet users click on some internet post that's paywalled, and the only option to access it is to subscribe to the whole publication to see it.

  • But what if you could just pay, say, 25¢, and it was really easy to do it? That's what Code is aiming at doing.
  • With existing payments rails, it's not worth it for paywalled sites to offer payments that low. On Code, each payment costs 1¢, its CEO said in this podcast. It can support payments as low as 5¢.
  • The iOS app has a nice looking experience, which is demonstrated in this promo video — Android is on the way.

By the numbers: Code builds upon the kin (KIN) cryptocurrency. Kin's value is enumerated in thousandths of a penny, because it's designed to be very easy to spend small amounts of money.

  • The max supply of Bitcoin is 21 million, while there are about 3 trillion kin in the world.

Reality check: The most immediate friction point for Code now is the same as lots of other cryptocurrencies: the bridge to dollars and other fiat currencies.

  • A spokesman said they hope to get that natively in the app...one of these days.
  • For now, getting funds on your Code app requires users to do some bouncing around crypto exchanges and blockchains, which is going to hinder its ability to really change the creator economy as we know it.

Catch up fast: Code was initially funded with the proceeds from selling Kik, which was once a very popular messaging platform, like Messenger or Telegram.

  • It was at Kik that the team created Kin, which was once upon a time a cryptocurrency with its own blockchain.
  • The company had raised $100 million in a 2017 initial coin offering, but the SEC won a summary judgement against the firm for an unregistered security offering in 2020.
  • It was a brutal process, but Kin has persisted, pivoting to the Solana blockchain the same year.

Quick take: If Code's app makes kin click with the public, look for some regulatory scrutiny in crypto land (first time for everything).

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