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NEW DELHI: CoinDCX recently became India’s first crypto unicorn, raising $90 million in its Series C funding round at a valuation of $1.1 billion. The round was led by Facebook co-founder Eduardo Saverin’s B Capital Group, along with other investors.

In an interview to Mint, the startup’s co-founder and CEO, Sumit Gupta, talked about how they intend to use the funds, banking issues and why venture capital money is still bullish on India despite regulatory uncertainty. Edited excerpts:

How has your journey been so far?

It has been roughly three years for us, and the journey has been a rollercoaster. Days before the launch of our platform, the Reserve Bank of India (RBI) came out with a circular banning banking services to the crypto industry. Some of our investors backed out, but some still had faith.

Our work at CoinDCX during all these years has been challenging, but it has also been full of learning. We are still in a largely unregulated market. However, with new users and increased awareness, I believe the government would take the right steps to regulate and build a healthy crypto ecosystem for the country.

How do you intend to use the funds you recently raised?

Three areas where we will continuously focus on are - safety, because that is something a lot of people care about when it comes to crypto; simplicity - how easy it is for someone to buy the first crypto. Simplicity is a big part of our motto. And compliance.

Also, we feel that India can grow with the right crypto education and awareness. We will continuously launch reading material, content, videos in terms of crypto education and blockchain technology learning.

We will ramp up our product offerings, tech infrastructure, and to achieve all of that, we will onboard a lot of people and engineers. Right now, we have a staff of 185, almost touching 200 in the next couple of weeks. So, by the end of this year you will see us increasing our strength by 70-100%.

Do you intend to also move onto other products, like offering non-fungible tokens (NFTs)?

As of now, the focus is on crypto investing – making it easier for Indians or onboarding 50 million Indians into crypto and educating them. These are the fundamental problems we aim to first solve, instead of starting with a new product. There is a lot of interest in NFTs, and we are in a business of making crypto investing easier, but maybe in the near future, after achieving our primary goals, we may jump into other verticals.

Do you see consolidation happening in the near future in the crypto industry?

The industry in India has very limited players. Also, there is a lack of regulatory certainty.

With CoinDCX becoming India’s first crypto unicorn, a lot more people will want to look at the journey and take inspiration.

It’s a bit early to talk about consolidation or mergers and acquisitions (M&A). That will happen as the industry sees more and more capital infusion. This is the most obvious and natural choice given how the talent pool is limited.

Even at CoinDCX, we are happy talking to new companies, acqui-hire them primarily if there are teams that want to be part of our journey. The intent is not M&A, but getting the right talent overboard. In the future you might see that happening but there is still time to it.

You mentioned uncertainty regarding regulations. Despite that, why venture capital (VC) money has been flowing into Indian crypto industry?

Almost all top VC outside India has seen how the industry has shaped up in other countries and how governments had discussions internally and came up with a positive regulatory framework. The sense among VC investors is that the positive regulatory framework will also happen in India, and that makes me even more bullish that crypto will be regulated

Also, VCs that we have partnered with, it has been for the long term. We don’t talk two-three years, it is a 5-10 year vision and a strong belief that crypto will be a regulated asset class in the country. Short-term fluctuations don’t matter much.

I think crypto is going to be the fastest growing sector in India once regulations shape up. Access to capital is a bit difficult right now, but that will be streamlined as soon as there is even a hint of green signal from the government.

In terms of doing business, banking was a major pain point a few weeks back. What is the situation right now?

Banking was a problem in our case, especially two-three months back when the Bill discussions were happening. But now, with the RBI circular, banks are somewhat open to it, and we too have opened banking channels. Yes, all banks are not open to crypto following the RBI circular, but we’re seeing positive movement on that front and are engaging in discussions with the banks to make sure we follow their guidelines while also making them comfortable with the industry.

There is no unanimous stance from banks on the issue, it varies, but we have been seeing a neutral-to-positive approach from banks.

Bitcoin is back at the $46,000 level, but volumes haven’t gone back to the May levels. Is that a concern?

Volumes are standing at 60% of what they used to be earlier. Primary reason being the price at that time was $60,000-$65,000. Volumes are largely a function of price and volume comes from traders. They’re the ones contributing mostly to it, instead of investors.

Investors are still joining the platform, and many new investors are making their first crypto investments. Volume is an 80:20 roll, with 80% coming from traders. So volumes are largely a function of how volatile the market is, or what the price of the crypto is, the interest levels, etc.

As of now, the market is relatively stable and not so fast moving. This explains the lower volumes with respect to May levels. It isn’t an indicator for the investor. Long-term investors are showing a trend of holding onto their crypto, which is why new investors are also entering at this time of a lower price.

Do you aim to be India’s first crypto company to come out with an IPO?

It’s too early to say that, and we believe we’re still at the start of our journey, with lot more grounds to cover. We’re focused more about developing better user experience with the app and have the intent to educate people more about crypto, help come up with the right regulatory framework as well as making sure that anyone interested in crypto can invest seamlessly.

IPO might be far ahead in the line, but right now we’re just heads on trying to build the right crypto ecosystem for the country.

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