CoinDCX became India’s first cryptocurrency unicorn after the exchange raised 6.70 billion rupees ($90 million) from investors led by Facebook Inc. co-founder Eduardo Saverin’s B Capital Group, even as local authorities push back against crypto assets.
The latest funding round values the firm at $1.1 billion, Chief Executive Officer and co-founder Sumit Gupta said in an interview Tuesday. Other investors include existing partners Coinbase Ventures, Polychain Capital, Block.one, and Jump Capital.
Gupta plans to use part of the funds to double his team in the next six months to about 400 people in India, where investments in crypto grew to nearly $6.6 billion in May from some $923 million in April 2020, according to Chainalysis. The investment comes as policymakers continue to debate on the status of digital currencies in India — as recently as last week the central bank said it has “major concerns” about private virtual currencies and the government will take a final stance on the matter.
“I am pretty sure the industry will be regulated at the right time,” Gupta said. “We have chosen to put at stake our money and career as we feel this is going to be a very good wealth generation opportunity for people.”
The 30-year-old engineer from the elite Indian Institute of Technology spent several hours daily reading about blockchain and cryptocurrencies before setting up CoinDCX in 2018. Registered in Singapore as Primestack Pte., it aims to expand its user base to 50 million from 3.5 million over the next few years and focus on educating users on crypto and blockchain.
Investments surged after the Supreme Court last year quashed a ban on banks facilitating crypto trades. The four biggest crypto exchanges in India saw daily trading jump to $159 million from $28.6 million a year ago, according to CoinGecko.
For regulators, the volatile nature of the asset has been a worry. After touching a high of $64,870 in April, Bitcoin lost more than half of its value and fell to $28,824 in June. The asset has since recovered and was trading up at about $45,270 at 8:05 p.m. in Singapore. The Reserve Bank of India is looking to create its own digital currency.
The Indian government will explore using blockchain technology, Junior Finance Minister Pankaj Chaudhary said in a reply to parliament Tuesday. He also said India doesn’t consider cryptocurrencies legal tender, and would take all measures to eliminate use of crypto-assets in financing illegitimate activities or as part of the payment system.
Gupta believes India has what it takes to achieve dominance in the space. The company plans to offer new products including for wealthy individuals in coming months.
“We have a very tech savvy population, good mobile penetration, big base of engineers and developers who can leverage blockchain technology,” Gupta said. He believes India will produce more than 100 crypto unicorn start-ups in the next few years once regulation is firmed up.