Cascaded quadratic optical nonlinearities are well known for producing effective third‐order nonlinear optical effects such as self‐phase modulation or self‐steepening. As a result, they have been extensively applied in areas such as mode‐locking and pulse compression. In this article, a regime of cascaded quadratic nonlinearities involving highly phase‐matched second‐order interactions is introduced, which produce an effective third‐order nonlinearity analogous to Raman shifting rather than the typical case of self‐phase modulation. This results in a continuous red‐shift of the optical pump frequency rather than spectral broadening. This phenomenon is particularly relevant to terahertz generation, where a continuous red‐shift of the pump frequency resolves current issues of dispersion and laser‐induced damage. In the absence of absorption or dispersion, the presented method results in optical‐to‐terahertz energy conversion efficiencies that approach 100%, which is not possible with conventional cascaded difference‐frequency generation. Designs of aperiodically poled lithium niobate structures are presented, which result in energy conversion efficiencies of 35% even in the presence of dispersion and absorption. The presented work thus addresses an important bottleneck in terahertz generation, which paves the way for the development of compact particle accelerators, X‐ray free‐electron lasers, advanced electron‐beam diagnostics, and various experiments in condensed‐matter physics and chemistry.