Bengaluru-based cryptocurrency trading platform Unocoin has raised an undisclosed amount from US venture capitalist Tim Draper’s Draper Associates, along with participation from XBTO Ventures and 2020 Ventures.
Draper, who has famously backed companies such as Skype, Twitter and Tesla, will lead an ongoing funding round in which the crypto startup expects to bag as much as $5 million at a valuation of $20 million.
The investment comes seven months after the Supreme Court struck down the Reserve Bank of India’s ban on banking institutions from providing services to cryptocurrency services in the country.
Since then, Unocoin says it has seen a 10X growth in its business, clocking daily trades of Rs 3-4 crore, and is adding around 200-300 new customers daily, taking its total base of users to a little over 1.3 million.
“Things have come back to normal,” said Sathvik Vishwanath, CEO of Unocoin. “The ban was reversed, and the market is fully open. Being unregulated means there’s also some kind of regulatory clarity, but only in the future when new rules come up, will the shift take place.”
Vishwanath added that Unocoin intends to use the fresh capital to strengthen its product, hire new talent, expand its market and also educate new cryptocurrency users.
The company is also looking at growing the base of merchants accepting cryptocurrency as a mode of payment from its current base of 2,300 businesses.
“We were delighted to hear the verdict by the Indian Supreme Court, and we had been tracking Unocoin, the leader in India for Bitcoin for years. We are so thrilled that the stars aligned, and we could finally back Unocoin. Every Indian should have a Bitcoin account with Unocoin. It is a great way to do business in a currency that doesn’t devalue over time,” said Tim Draper, founder of Draper Associates.
Unocoin is also looking at turning profitable within the first two months of the upcoming calendar year, with the company pocketing a 0.7% cut from all crypto trades its customers make on its platform. This will mark a complete turnaround for Unocoin, which was on the brink of closure and laid off most staff early last year.
“The biggest issue was that we were not able to take money from our customers from their bank accounts, and now that things are back on track, we not only have individual customers, but also corporates who purchase or invest in bitcoin from us,” said Vishwanath.
Unocoin’s co-founder Harish BV was jailed by local authorities in Bengaluru in October 2018 after the company launched a cash deposit machine, which was branded as an ATM, to get around the RBI’s ban.
At the time, the company — credited as India’s first cryptocurrency exchange — found immense support from the broader startup and venture capital communities in India.