‘India cannot afford to miss out on the crypto revolution’

NEW DELHI: Longtime friends Ashish Singhal, Govind Soni and Vimal Sagar Tiwari founded CoinSwitch Kuber in 2017 as a global aggregator of cryptocurrency exchanges, where users could compare prices of different digital assets. That solution gained traction and within a month of the launch, the startup was doing business of around a million dollars in gross merchandise value (GMV) a day. This subsequently led to funding by Sequoia. 

The journey changed a lot last year after the Reserve Bank of India’s ban on cryptocurrencies was overturned by the Supreme Court in March 2020. CoinSwitch Kuber launched an India exchange in June 2020 with an aim to make crypto buying and selling as easy as ordering food online.

Today, the company claims to have 90 lakh users in India and 60% of the market share, with almost 90% of its revenue coming domestically as against 60% at the start of the year. The startup has been funded by the likes of Ribbit Capital, Paradigm and recently by Tiger Global Management, giving it a valuation of around $500 million. 

CoinSwitch Kuber’s co-founder & CEO, Ashish Singhal, and chief business officer, Sharan Nair, talked to Mint on the company’s fundraising plans, new product launches and business targets. Edited excerpts:

What is the next step in your journey?

Ashish Singhal: We want to go deeper into crypto, launch more products and innovations in crypto, as well as venture into other asset classes. We can delve into that when the plans are more concrete. However, we aim to create more comprehensive portfolio management for our users who are really young and come from tier III and tier III cities. These people are trying to invest in crypto as the first investment of their life. There are multiple products in the pipeline that will come up in the next two months.

Finance minister Nirmala Sitharaman has said the crypto bill is awaiting approval of the Union cabinet. What makes you hopeful that the final regulations will be positive?

Singhal: Crypto is a new innovation. Every new innovation has its drawbacks, and advantages. Crypto would be the next revolution in the Internet age, building more digitally savvy products and pushing countries towards digital economies. India cannot afford to miss out on this revolution. We’ve already missed out on Internet 1.0. At least some of the companies, like Google and Facebook could have originated from India but we weren’t able to do that well enough. We believe that countries will be able to figure out the regulations to reduce the cons and focus on the pros.

Sharan Nair: Most of the comments coming in from Nirmala Sitharaman are optimistic. They specifically talk about how there has to be a way out for dealing with cryptocurrencies. Also, there seems to be movement internally in the ministry, where there have been some proactive talking with exchanges. So, we’re hopeful on that end, and things are looking way better than they were before.

You raised $15 million in Series A funding in January, and then there was another round of $25 million in April. Are you in talks with investors for the next round of funding?

We are in talks at the moment, and there is definitely some exciting news with respect to the company, and the products that we are building and launching, and the kind of way in which we are growing. You can definitely expect something good coming out of CoinSwitch Kuber soon.

How have ad campaigns aided your growth?

Singhal: Since April we have grown overall 3-4 times, not just because of these ad campaigns, but because the team has done some brilliant exercises in partnering with media organisations. Through these initiatives, we have gone to over nine million users. I think in March, we sat at around three million users.

We were at about 1.5 million users at the end of December. In terms of volumes, although we don’t reveal our actual volume numbers, we have grown almost 10-12 times in terms of absolute number in terms of daily transactions.

Now a lot of our users are young from tier II and tier III cities, who are trying to get into crypto as their first investment class. Today, 60% of our users come from these cities, which is around 5.5 million users. With internet penetration, there has been a greater boost in crypto. Crypto was banned till April last year in India, while the entire world was moving towards it. There was a big untapped market that was just waiting to enter crypto.

What are the major focus areas?

Nair: Today, the entire focus is on policy and regulations. So, a lot of work has been around creating awareness for stakeholders in the government, because a lot of their concerns are genuine to be honest. Second, when the crypto industry tries to move, there are a lot of people who want to make quick money from scamming people. So, the most important thing that most people don’t talk about is the security of funds. We are working on that.

What are your business targets for this year and what steps are you taking in that direction?

Singhal: This year, we want to reach $100 million dollars in revenue. And that’s the big goal that we have set for ourselves. We earlier set the 10 million user goal as well for the end of the year, but I’m sure we’ll cross that in the next month itself, and it would be a much bigger goal that we would set for ourselves till the end of the year 2021.

The first key step we are taking for achieving that, is education. The biggest hurdle in this industry is misinformation. People don’t know what cryptocurrencies are all about. There are concerns that are genuine, but there is a lot of good that is happening in the industry, and our job as industry leaders is to propagate that, to partner in with the best, create the best content, and inform users about cryptocurrencies, while allowing them to choose for themselves.