Bitcoin’s journey in India has so far has been a dramatic one. Just three years ago, a bitcoin exchange was raided and shut by a team of Enforcement Directorate (ED) officials as it was supposedly violating India’s Foreign Exchange Management Act (FEMA). Now, another exchange has created history for quite a different reason: by having the highest fundraising total for a digital currency venture in India. This is a reflection of the positive stance (though not definite yet in the absence of set rules and guidelines) of regulators and the rising popularity and scope of bitcoin in India.
Bengaluru-based Unocoin has raised $1.5 million in a “Pre Series A” round of financing, a record high for any bitcoin company in India. The funding came from prominent Indian and international investors such as Blume Ventures, Mumbai Angels and ah! Ventures, Digital Currency Group, Boost VC, Bank to the Future and FundersClub. (See also, Fundraising By Bitcoin Startups in India.)
“We’re honoured to have this type of support from top investors,” remarked Unocoin co-founder and CEO, Sathvik Vishwanath. “We started from my small hometown called Tumkur near Bangalore, and our goal from the beginning was to make it easy to get bitcoin in India. A few years later, we are now headquartered in Bangalore with 30+ employees, serving more than 100,000 customers across the country and that number is growing exponentially. Given our steep growth rate, we’re looking to serve millions more in the coming years.”
Unocoin is a technology startup and it is a pioneer in India’s bitcoin (BTC) industry. Its BTC-INR trading platform is among the largest in the country, catering to more than INR 200 million worth of transactions, for its 100,000 customers. Unocoin can proudly boast of having more than 30 top investors from 5 countries on board in less than three years since its inception. The company has been actively innovating and introducing services which makes bitcoin trading, usage and adoption much simpler and widespread. Some of its leading innovations are the Bitcoin Systematic Investment Plan (SIP), Bitcoin Point of Sale (POS) App and Bitcoin Over-The-Counter trading (OTC).
Unocoin co-founder and president Sunny Ray said, “When we first learned about Bitcoin back in 2012, we knew that Bitcoin was going to be a big deal. The question we kept asking ourselves, however, was: ‘How do we bring the benefits of Bitcoin to Indians while systematically protecting against the downside risks?’ In the absence of clarity, we were the first company in India to seek out and work closely with top techno-legal firm in the country, Nishith Desai and Associates. We were also the first Bitcoin company in India to implement a comprehensive compliance and banking like framework to address these challenges.”
Past Trends
While digital currency companies in India have done some fund raising campaigns in the past, the money inflow is only getting better with time. Back in August 2014, Unocoin attracted a sum of $250,000 from the well-known Digital Currency Group (DCG), founded by Bitcoin enthusiast Barry Silbert. In January 2016, Zebpay successfully raised almost $1 million in Series-A funding primarily led by private equity investors. Zebpay intended to use the funding to scale its Bitcoin and blockchain-based services, as well as divert some amount towards talent acquisition. In April, Delhi-headquartered Coinsecure raised $1.2 million during its Series-A investment round.
India Opportunity
India presents an immense scope for bitcoin; Firstly, India has the second-largest diaspora in the world of approximately 25 million. With such a large overseas population, India is a top remittance destination. According to the World Bank, “India retained its top spot in 2015, attracting about $69 billion in remittances, followed by China with $64 billion, the Philippines ($28 billion), Mexico ($25 billion), and Nigeria ($21 billion).” Bitcoin can cut the huge costs paid during remittances, placing that money in the hands of people to whom it rightfully belongs. Secondly, although India’s current internet penetration is 27% compared to 87% in the U.S. and 46% in China, it is expected to increase substantially given the rising usage of smartphones and availability of high speed internet which sets the stage for increasing bitcoin usage in India. The current 331.5 million internet user base is projected to double in a few years driven by the government initiatives such as ‘Digital India’ according to a KPMG report. Thirdly, Indians love gold as an investment, and bitcoin in many ways is comparable to the precious yellow metal. Like gold, bitcoin’s supply is limited and it makes a good diversifier to an investor’s portfolio. There are other reasons as well, like India’s vast unbanked population. (See also, India: Migration, Remittance & Bitcoin)
The Bottom Line
While India has the right elements, such as high remittance rate, rising internet availability and usage, a set of clear and well structured regulations along with rising awareness levels among people is what will make bitcoin more popular in the country.
SOURCE: India’s Bitcoin Startups & the Fundraising Gold Rush | Investopedia http://www.investopedia.com/news/indias-bitcoin-startups-and-fundraising-gold-rush/#ixzz4MQuYXN8Y
