Now valued at $500 million, Cosmose ditches Stripe to adopt Near’s crypto solution

Image credit: Cosmos AI

Despite all the investment speculation and hype, cryptocurrency has so far struggled to find meaningful use cases. Now there is some effort from Singapore to turn the general public into crypto adopters through blockchain payments.

Cosmose AI, a nine-year-old company that uses AI analytics to track in-store foot traffic and engage with customers online, is partnering with Near, one of the blockchain protocols competing with Ethereum. The pair is building a payment system that allows users to trade crypto at low transaction fees, saving money for both buyers and sellers.

As part of the partnership, the Near Foundation, the non-profit arm of Near that supports the protocol’s ecosystem development, has made a strategic investment in Cosmose. The round, the amount of which was not disclosed, lifts the company’s valuation to $500 million, up from $100 million when it closed its $15 million Series A funding in 2020.

Cosmos’ suite of retail solutions includes the KaiKai app that allows customers to discover retail stores in their physical vicinity and an online targeting platform, both of which are getting a blockchain makeover with Near’s help.

Miron Mironiuk, the company’s founder and CEO, had no intention of riding the crypto wave; rather, he sought a solution that would make online payments cheaper for consumers and vendors that Cosmose served.

“I’m not sure if you know how expensive and slow it is to process online payments. It’s absolutely crazy,” Mironiuk told TechCrunch in an interview.

He gave an example of buying a $5 cup of coffee. Payment processing companies like Stripe and PayPal effectively charge over 10% for small transactions, so the seller ends up raising prices, forcing the buyer to pay 6-10% more. A year from now, the coffee drinker could easily spend an extra $200 just because the transactions are handled by middlemen like Stripe.

Pay with crypto

With its nearly blockchain-powered payment system, KaiKai, where users can discover nearby products and pay through the app, claims to reduce the transaction cost of one’s annual coffee consumption to just $4, which is 50 times less than the Stripe or PayPal method, according to Mironiuk.

“Imagine how much you can save if all payments are moved to the blockchain,” said the founder.

Not all blockchains are cheap to use. One of the biggest challenges to crypto customization is the exorbitant fees involved. Without a centralized settlement system, cryptocurrencies rely on a distributed network of validators to verify transactions on the chain. That process on Ethereum is notoriously expensive, so alternatives like Cardano, Pokadot, and Near have emerged to make crypto cheaper and more scalable.

Cosmos’ team across Warsaw, Shanghai, Hong Kong, Singapore, Tokyo and Paris. Image: Cosmos AI

Cosmos’ shopping discovery app KaiKai settles payments in its native stablecoin Kai-Ching, which runs on Near’s network. The app creates a crypto wallet for users, who can top up Kai-Ching with fiat currencies. In the future, users may have the option to convert Kai-Ching back to fiat.

Cosmose maintains a treasury of Kai-Ching, which is pegged to US dollars (1 Kai-Ching = 1 USD cent) and tradable only in the app to prevent value volatility.

KaiKai first launched the ability to pay with crypto in Singapore last September, where the government is in the process of formulating a stablecoin regulation. Since then, Kai-Ching has processed over 1 million transactions in the form of payments, refunds and rewards.

Prices are lowered automatically when users choose to pay in Kai-Ching. Over half of Ka-Ching’s users are Gen-Z, and they are “super comfortable” with crypto because they know “the coins are on chain” and “they own it,” the founder observed.

The company declined to reveal how many crypto users it has accumulated, but one data point illuminates user behavior: A third of transactions are paid with Kai-Ching. Given its traction in Singapore, it wouldn’t be surprising if Cosmose takes Kai-Ching to other crypto-friendly jurisdictions in the future.

Own your data

Cosmose and Near are onto something that seems even more ambitious. One of the promises of blockchain-based applications is to return control of personal data back to users rather than keeping it with Big Tech’s centralized servers.

Essentially, Near Cosmose helps migrate user data to its blockchain and build out a system where users can see how the company tracks them, including their location, when they open the app, the products they browse and how long they stay.

The goal is to store user data on their phones using edge computing and let people decide how they want to be tracked to receive more or less precise product recommendations and rewards.

“It’s not just a technical challenge. There’s also a user experience challenge of how to do it in a way that people can actually check it and get some insight and decide quickly,” the founder said.

Since its inception, Cosmose has served over 20 million stores and reached one billion phones worldwide, with China accounting for “hundreds of millions” of them. The company has a team of 80 employees across Warsaw, its engineering base, as well as Shanghai, Hong Kong, Singapore, Tokyo and Paris.