coinswitch kuber India’s second crypto unicorn has raised over $260 million in a Series C funding round led by US venture capital firm a16z (Andreessen Horowitz) and Coinbase Ventures at a valuation of $1.9 billion.
Bengaluru-based CoinSwitch also becomes 30th unicorn startup in India, and is now worth more than CoinDCXA valuation of $1.1 billion was announced in August.
In addition to a16z (Andreessen Horowitz) and Coinbase Ventures, which were also part of CoinDCX’s recent funding round, existing investors Paradigm, Ribbit Capital, Sequoia Capital and Tiger Global have also participated in the CoinSwitch round.
The crypto exchange was founded in 2017 as a global aggregator of cryptocurrency exchanges by Ashish Singhal, who has worked at Amazon and Microsoft in the past and is the CEO of CoinSwitch. Govind Soni and Vimal Sagar are the co-founders and hold the positions of Chief Technology Officer and Chief Operating Officer respectively.
With a focus on simplifying crypto investing and online food ordering, the exchange started operations in India in June 2020.
According to Singhal, the newly acquired funds will be used to create new asset classes. “These will be standard asset classes that you see in the market, not related to crypto,” he said. “Many of the people who invest with us are under the age of 28 and are first time investors who have not invested in any asset other than crypto. These young users want to grow with us as a platform, crypto. want to put themselves at risk from the volatility of the market, and eventually have a portfolio that is balanced on the volatility end,” he said.
The new asset class will not allow investors to use crypto to buy traditional assets. Instead, it will work with regular crypto exchanges and allow users to use fiat currencies. Singhal said plans to make this side of the business are still underway. The company expects its new products and services to help grow its user base from 10 million users now to 50 million eventually.
In addition, it also wants to increase hiring. Singhal said that apart from leadership hiring, the company is also looking to hire experts in engineering, product, data and even compliance to tackle the current regulatory scenario. He said the company may also look overseas for talent, but is still exploring it.
On the regulatory front, Singhal said he is “really positive” about the regulations right now. “The tonality of the finance minister and others regulating crypto has really changed. They are sending out clear statements right now, saying they will not shut down crypto. We have also seen policymakers from experts in the crypto space. This funding, as it includes investors like a16z, who have never invested in India before, will also create confidence among regulators,” he said.
In addition to hiring and new asset classes, CoinSwitch Kuber will also launch a new ecosystem fund to invest in other crypto and blockchain companies in the country. “The first agenda is to identify companies that are using blockchain to solve issues for India,” he said. The funds will also be used to create crypto awareness in India and make strategic investments that can help the platform grow its business.
The unicorn valuations of CoinSwitch and CoinDCX come at a time when the crypto industry has been at loggerheads with the Indian government. In June, the Enforcement Directorate (ED) issued a show-cause notice to WazirX, India’s largest crypto exchange by trading volume. The notice alleges the platform has violated exchange rules with rupee crypto transactions in India. 2790 crores.
In August, WazirX said it had more than 7.3 million users in India, while CoinDCX said it had added 3.5 million users with its funding announcement last month. Unlike the other two, WazirX was acquired by the world’s largest crypto exchange, Binance, in 2019. Although the company has not disclosed its valuation, its WRX crypto token tentatively reached $1 billion in April this year. Native tokens issued by crypto firms are often an integral part of their valuation.
Meanwhile, cryptocurrency adoption in India is also on the rise, despite regulatory uncertainties. According to an October report by blockchain research firm Chainalysis, the country ranks among the top three in the world in terms of crypto adoption, after Vietnam. However, Chainalysis noted that Indian investors were more mature than Pakistan and Vietnam – the other two in the top three – with more institutional investors joining the market.
CoinSwitch’s Singhal also said that the company plans to pursue institutional investors, but will modify its platform to accommodate their needs. This involves giving investors ownership of their wallet instead of keeping their funds in the exchange’s own wallet.
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