Why we invested in Rhythmic

The Venture Dept. is proud to share our investment in Rhythmic, a company building stablecoin-powered embedded financial services for consumer brands. The $4M seed round was led by Dragonfly, with participation from Mirana Ventures, The Fintech Fund, and others. You can read coverage of the announcement in Fortune.

Rhythmic partners with consumer-facing companies to offer their customers a full financial product: stored value accounts, co-branded Visa cards, and rich rewards programs, all powered by stablecoins behind the scenes. The vision is one where brands from crypto-native platforms to traditional consumer companies can offer their customers the kind of deeply embedded financial experience that Starbucks built with its loyalty program, but at far lower cost and with the programmability that stablecoins make possible. Users get better rewards and a more useful financial product. Brands get deeper engagement and a new relationship with their customers' financial lives.

Here's why we invested.

1. Stablecoins as a platform for innovation, not just a payment rail.

Stablecoins have become default infrastructure for payments. The question the industry is now asking is what new things become possible because of them. Rhythmic has a compelling answer: programmable rewards, yield-bearing stored value, and event-driven cashback experiences that traditional fintech cannot replicate at this cost structure. A user earning meaningful cashback generated from stablecoin yield, invisible to them but real in its value, is something qualitatively different from a points program running on legacy rails. Rhythmic is building in the gap between what is now technically possible and what the market has so far delivered to everyday users.

2. A traditional finance pedigree pointed at a broader audience.

One of our consistent investment principles is backing digital asset infrastructure that expands the pie. We are most excited when the people building that infrastructure come from the world it is trying to reach. Aaron Marks spent five years at American Express and then at Circle. Joseph Hayes spent more than eight years at Mastercard before leading crypto and stablecoin product at Walmart. These are payments professionals who came to stablecoins with the credibility, the distribution instincts, and the enterprise relationships to bring this technology to audiences that most of the industry has not reached. That combination is rare and it is central to why we believe Rhythmic can build something that goes well beyond crypto-native users.

3. Compliance as a competitive advantage, built in from day one.

In embedded finance, the companies that win long-term are the ones that earn the trust of large enterprise partners. That requires a compliance posture that incumbents can point to and regulators can examine. Rhythmic understood this early. One of their first hires is Chief Legal Officer Jason Allegrante, who comes from Fireblocks. Bringing in that level of legal and compliance leadership at this stage of the company is a deliberate signal about how Aaron and Joseph intend to build. The next generation of stablecoin-powered fintech companies will be defined by how well they build frameworks that make regulatory engagement a strength. Rhythmic is doing exactly that.

We're excited to support Aaron, Joseph, and Jason as they bring stablecoin-powered financial products to the brands and customers that mainstream fintech has yet to reach.