Indian startup scene has seen explosive growth
India is a hotbed for startups, with over 3100, making it the third largest base in the world for budding enterprises. According to a study released by The National Association of Software and Services Companies (NASSCOM) in the ongoing Product Conclave 2014 in Bengaluru (formerly Bangalore), growth of online consumers, capital availability and acquisitions have spurred the startup activity in the country.
Mr. R Chandrashekhar, President, NASSCOM, said, “The Indian startup ecosystem is rapidly evolving driven by an extremely young, diverse and inclusive entrepreneurial landscape. This is leading to the emergence of focused domain solutions for verticals like healthcare, agriculture, and education etc.” He says that a four-fold increase in access to capital through venture capitalists, angel investment and seed funding is giving Indian entrepreneurs an opportunity to get their foot in the door for building innovative products that cater to specific consumer needs.
India bitcoin startups are part of the larger trend
The country is also seeing a gradual rise in the number of entrepreneurs who are venturing into the largely unexplored Bitcoin space. Unocoin, a Bitcoin exchange and payment processor received USD $250,000 in funding from Barry Silbert from the Bitcoin Opportunity Corp. in August this year. The company, based in Bengaluru, is channeling its efforts towards getting businesses to accept bitcoins. The company has also stopped its policy of charging a 3% transaction fee. Founder Sathvik Vishwanath also hope to cater to the burgeoning remittances market opportunities that India presents.
Bengaluru is home to over a quarter of these startups. Benson Samuel, CTO & Founder of CoinSecure, is committed to spreading Bitcoin awareness in the country. The Founder of Bangalore Bitcoin Meetup says in his blog that cryptocurrencies offer a level playing field to Indian entrepreneurs since they are as global as email. It opens up crowdfunding opportunities from anywhere in the world to infuse Bitcoin startups with funding.
Indian Government is making it easier
New measures introduced by India’s Prime Minister Narendra Modi have injected the business world with fresh hopes for a thriving entrepreneurial environment. The ‘Make in India’ campaign aims to set right India’s notoriously difficult business setup procedures and red tapism. Registration of businesses, payment of taxes, contracts and permit procedures are set for an overhaul to facilitate the arrival of investors and industrialists in the country’s booming business arena.
While this is good news for several sectors, there is still a degree of ambivalence among entrepreneurs who wish to dive into the Bitcoin space as there are no clear regulatory guidelines from the government. In the wake of this, BTCXIndia, a Bitcoin exchange based in the city of Hyderabad, has chosen to follow the compliance rules of financial institutions by choosing to implement strict know-your-customer (KYC) rules and anti-money laundering (AML) regulations.
Regulation uncertainty is still an issue
While Bitcoin is not illegal in India, for the development of products and services built around Bitcoin to power up to full speed, the federal government has to issue its stand on the matter. Only then, can the entrepreneurial community hope to build and bring innovative products into the market without having to look over its shoulder for possible missteps unwittingly taken.
Venture Capital community in India takes note
Maninder Gulati of Lightspeed Ventures India has predicted that over US $100 million of venture capital will flow into bitcoin startups this year. With the ease of doing business in the country expected to improve, it remains to be seen if India’s Bitcoin hopefuls get a share of the investment pie, or if their efforts will be limited by fears of walking into the haze of regulatory uncertainties. As Benson Samuel says, “If current laws are applied to a future technology, no one is going to get it right.”