Andreessen Horowitz and Coinbase Ventures have hit a new unicorn in India: CoinSwitch Kuber. The two companies co-led a $ 260 million investment in the Bangalore-based cryptocurrency trading startup, valuing the young company at $ 1.9 billion, they said on Tuesday.
This is a16z’s first investment in India. TechCrunch reported last month – twice – that the two companies were in talks to back the Indian startup and had offered a valuation of $ 1.9 billion.
The four-year-old startup, which including Wednesday’s Series C has raised around $ 300 million to date, was valued at over $ 500 million in its Series B funding in April of this year.
Existing investors Tiger Global and Sequoia Capital India also participated in the new round, which is also the largest for a cryptocurrency startup in India. CoinSwitch is the 30th Indian startup to become a unicorn this year, and only the second in the crypto space. (CoinDCX, backed by B Capital, became India’s first crypto unicorn in August.)
CoinSwitch is one of the few startups in India that allows users to buy and sell cryptocurrency. Features and UI perspective, its offerings are far superior, according to dozens of users TechCrunch has spoken to in recent days.
The eponymous app offers users over 70 cryptocurrencies to choose from and trading is instantaneous, said Ashish Singhal, co-founder and CEO of CoinSwitch Kuber, in an interview with TechCrunch. Users of the app can trade as little as 100 Indian Rupees, or $ 1.3.
CoinSwitch has amassed over 10 million registered users, most of whom are young first-time investors, he said. More than half of the startup’s user base is 28 or younger, he said.
The enthusiasm for the cryptocurrency trade comes as the largely young Indian population has reached the inflection point, he said. âYoung people increasingly see investing as an option,â he said.
India’s Supreme Court overturned the country’s central bank’s ban on cryptocurrency two years ago – leading banks to play well (a bit) with the trading app – a also helped, he said. “When this happened, many young people who had watched crypto trading in Western markets and realized that they were somehow late in getting into crypto, decided to explore investments, âhe said.
But it hasn’t escaped the startup that most of its users are new to this world of investing. To address this issue, CoinSwitch Kuber recently partnered with Indian media NDTV to publish articles explaining cryptocurrencies, trading, and the risks associated with it. He also hosts a podcast on this topic, he said.
Andreessen Horowitz’s first investment in India
âWe are incredibly excited about the opportunity of the crypto market in India, and with its exceptional growth, CoinSwitch has become the country’s leading retail platform,â said David George, General Partner at Andreessen Horowitz, in a press release. “Ashish and his team have demonstrated strong execution skills and ambition to provide an investment platform for the masses in India.”
A16z’s arrival in India comes at a time when startups in the world’s second largest internet market are raising record capital. Several of the company’s global peers – Tiger Global, Sequoia, Falcon Edge Capital, Lightspeed, Accel, Temasek and SoftBank – have stepped up the pace of their investments in the country in recent quarters.
The company has been exploring markets like India for years. Speaking at a Stanford Graduate School of Business five years ago, a16z co-founder and general partner Marc Andreessen (pictured above) said it was “extremely tempting” to support startups from emerging markets. But it was also difficult for a venture capital fund to expand to more countries, he explained. Venture capital is a “very practical process of understanding the people you work with to value the business and work with the business.”
“If it continues to be a practical business like this, then there is the problem of geographic remoteness, that is, if I am not present in another geography, I really know these people to make the decisions. So what a lot of companies have tried to do is staff local teams. But then there is the basic problem that if the local team is really good then they can easily go and run their own businesses. If they’re bad, they keep working for meâ¦ which has its own issues.
According to people familiar with the matter, A16z has evaluated a handful of other startups in India in recent months. The company said it is investing in CoinSwitch from its crypto and growth funds.
âWe are touched by the confidence shown in CoinSwitch Kuber by two of the biggest names in the global crypto investing arena, Andreessen Horowitz choosing us to be their first investment in India. The investment from Coinbase Ventures is also a testament to the confidence they have in CoinSwitch Kuber’s business model and the enormous potential that the Indian crypto space has to offer, âSinghal said.
CoinSwitch Kuber’s future plans
Singhal said the startup will deploy the new capital to add more asset classes to invest on its app. But he refused to reveal what these asset classes will be. What’s more, he’s also working on adding support for institutional clients to use the app, he said. The startup, which aims to amass more than 50 million users, says it is also looking to hire for several positions within the company, many in executive positions.
One of the typical movements of many Indian crypto trading startups in recent years is to expand outside of India. This is in part to make up for any catastrophic regulatory changes in India. Singhal said CoinSwitch Kuber will continue to focus on users in India and has no plans to expand outside the country.
In recent months, several Indian ministers have spoken negatively about the potential risks of cryptocurrencies and have suggested that they could ban cryptocurrency in the country. Singhal said the engagement he has had with lawmakers has been fruitful so far and by bringing so many prominent and credible investors into the cryptocurrency space in India, he hopes CoinSwitch will be able to defend its legitimacy.
âWill there be strict cryptocurrency regulations? ” He asked. “There should be because right now crypto is like the wild Old West.”