Bangalore-based Bitcoin start-up Unocoin has raised $1.5 million (m) in a Pre ‘Series-A’ investment round, a record high for any digital currency venture in Indian history. But while the founder’s vision is to “scale Bitcoin” to the masses and address a largely ‘unbanked’ nation, is it such a big deal really?
Well, it might appear on the surface it isn’t, except when one considers that India is a country where an estimated “50% are unbanked” due to a weak financial infrastructure according Simon Dixon, CEO of BnkToTheFuture that has invested around £62 million (c.$80m) for professional investors, Bitcoin Capital fund manager and crypto commentator.
Along with Max Keiser, founder of Bitcoin Capital and broadcaster, Messrs Dixon and Keiser are among domestic Indian and international venture investors in this fund raise. It includes lead investor Blume Ventures, headquartered in Mumbai that played a key role in leading Unocoin’s Pre-Series A round, Adam and Tim Draper’s Boost VC, Barry Silbert’s Digital Currency Group, Mumbai Angels, ah! Ventures, and FundersClub in San Francisco. So not too shabby then.
Digital Currency Group (DCG), which is based in New York City, supports Bitcoin and blockchain companies by leveraging their insights, network and access to capital. For DCG, their latest investment in Unocoin joins the US-based investor’s global portfolio of Bitcoin and blockchain companies spanning over 80 investments in more than 25 countries.
Bitcoin In India
Bitcoin adoption is skyrocketing in India. But then given that is the second most populous country on earth with a population accounting for 17.5% of the world total (1,267,401,849 as of July 1, 2014), it might not come as such a surprise. And, with Unocoin being the leading bitcoin operator in India, it might appear well positioned to capture expected growth in this market.
Addressing the role of Bitcoin in the Indian economy, Bitcoin Capital’s Dixon, stated: “In India, 95% of the people do not have credit cards and 50% are unbanked due to the country’s poor financial and payments infrastructure. And, we believe Bitcoin has a role to play in India in the long term.”
In relation to the investment, Keiser, who is also StartJOIN’s founder, remarked: “Unocoin is leading the charge when it comes to bringing bitcoin to India. We are excited to be working with this world-class team and look forward to supporting their continued growth trajectory.”
The capital raised will primarily be allocated towards “scaling out” Unocoin’s business. It is understood that they plan to make a few strategic technical hires, make investments into technical infrastructure and further investing for security.
The Unocoin Story
Sathvik Vishwanath, Unocoin CEO and co-founder who has over 15 years of entrepreneurial experience building software systems in the financial and virtual reality industry, reflecting on the origins to the Indian bitcoin startup explained: “We started from my small hometown called Tumkur near Bangalore [in 2013] and our goal from the beginning was to make it easy to get bitcoin in India.”
A few years later on, they located their headquarters in Bangalore with over thirty employees, serving over 100,000 customers across the country and growing exponentially. “Given our steep growth rate, we’re looking to serve millions more in the coming years,” said Vishwanath, who holds an MBA in IT and Business from the University of Melbourne, Australia.He added: “India has the largest gold, inward remittance, and IT markets in the world, all of which make it a perfect home for Bitcoin and blockchain technology. As such these are exciting times.”
Vishwanath, asserts that they have a clear vision at Unocoin – “Let’s Make Money Simple” – and indicated to Forbes that they are currently adding c.5,000-10,000 new customers each month on their platform.
According to Karthik Reddy from Blume Ventures, it was the belief in the team at Unocoin that encouraged Blume to participate. Reddy commenting said: “In Sathvik and team, we discovered not only the leading Bitcoin company in India, but a determination to educate all stakeholders, simplify Bitcoin’s usage, and bring another frictionless layer to payments and commerce.”
Blume Ventures expresses confidence that Unocoin will “further alter the landscape and make additional inroads into remittances and e-commerce in India.”
Commenting on their investment in Unocoin, Harshad Lahoti, Founder and CEO of ah! Ventures, who is at the helm of four companies in the financial services and consultancy space, said: “It’s no secret that usage of bitcoin is picking up rapidly and the concept has seen a warm welcome from freelancers and retailers in India.”
He added: “That’s when Unocoin, a venture backed by a strong team with industry acumen and a rocketing number of users, caught our attention. We believe Unocoin will continue to be one of the strongest players in India’s booming crypto-currency market.”
Other notable players in the space include BTCXIndia based in Hyderabad, Coinsecure, which was established in June 2014 and headed up by founder/CEO Mohit Kalra and one of India’s earliest and largest miners, and Zebpay with an office in Ahmedabad, Gujarat, which claims to be the “fastest and easiest way” to buy and sell Bitcoin.
Sunny Ray, co-founder and President of Unocoin, who has over 15 years of experience in business development in the robotics and financial industries, explaining the motivation for the startup said: “We started this company four years ago with the mission to bring bitcoin to billions. Bitcoin opens up a world that simply wasn’t possible before.
The electrical engineer who studied at the University of Toronto added that when they started they saw a “once in a lifetime opportunity to build out a secure platform for people to easily access bitcoin.”
Empowered with their current round of financing from many of the “best investors in the world” according to Ray, he boldly remarked that they believe that Unocoin is “strategically positioned to reach millions of people in the next few years.”
In the future, Unocoin believes that bitcoin has the “potential to take market share from gold, substantially reduce the cost of remittance and potentially bank the unbanked.”
He added: “When we first learned about Bitcoin back in 2012 we knew that Bitcoin was going to be a big deal. However, the question we kept asking ourselves, was: ‘How do we bring the benefits of Bitcoin to Indians while systematically protecting against the downside risks?’”
But in the absence of clarity, they were the first company in India to seek out and work closely with top techno-legal firm in the country, Nishith Desai and Associates. Furthermore, Unocoin were the first Bitcoin company in India to implement a comprehensive compliance and banking like framework to address these challenges.
Unocoin’s Vishwanath added: “We believe that we’re at the dawn of a new evolution where money itself is being reinvented. We love seeing so many of the smartest cryptographers, mathematicians, and computer scientists from all over the world working together to scale Bitcoin to the masses.”
Over the past year, the firm has been innovating swiftly. Evidencing progress, recently they launched a merchant point-of-sale (POS) app, a mobile trading app, an auto-selling feature for remittance users, systematic investment planning (SIP) to mitigate against volatility risk, integration with NETKI to simplify Bitcoin addresses, created an over the counter (OTC) desk for large traders, integrated with purse.io for discounts on Amazon, API for developers amongst other initiatives.
And, in the coming months and years, Unocoin aims to build practical, useful features and tools on top of Bitcoin. While following this fundraise Vishwanath revealed to Forbes that they are “not actively looking for additional funding” at this time, but if a “strategic investor is interested” in working with them they would consider such approaches.