The persistent belief of the founders of CoinDCX- Sumit Gupta and Neeraj Khandelwal in the power of crypto has enabled the startup to become the first crypto unicorn in India, even as a larger regulatory environment remains challenging for other players in the country.
Founded in 2018, CoinDCX has put together over 3.5 million users. The startup is aiming to take the user base to 50 million.
How it all started?
Both Sumit Gupta and co-founder Neeraj Khandelwal are IIT Bombay alumni. Gupta met Khandelwal in Kota, Rajasthan which is famous for its various engineering coaching establishments.
Their paths diverged after IIT as Gupta moved to Tokyo for his job with Sony in 2014 and it was here that he learnt about blockchain technology and cryptocurrency. He returned to India in 2015 and began his research into cryptocurrencies. He found that his college friend Neeraj Khandelwal shared his passion for crypto.
Sumit traded in cryptocurrencies that helped him get familiar with the concept. Initially, he had to struggle with challenges such as pricing, limited availability of tokens, liquidity and more. This experience helped them to take a step further.
They launched CoinDCX together in 2018 by pooling in all their savings to make up for 90 percent of the total capital. With everything seeming to be in place for their startup, they received a blow as the Reserve Bank of India (RBI) issued a circular in April 2018 banning all its regulated entities from facilitating services for or dealing in virtual currencies.
The duo had to use almost all their savings to run the startup for a couple of months.
This circular had put many cryptocurrency exchanges in the country in a precarious position, some had to even shut their shop.
The success factors
Three months after the setback, CoinDCX got a breather in form of investment from Bain Capital, a US-based global investment firm. At that point, it was a gamble for Gupta and Khandelwal since there was no clarity on the future of cryptocurrency in the country, and there was a question mark over its legality.
However, the gamble finally paid off. In August 2021, CoinDCX became the first crypto unicorn in the country after raising $90 million in a funding round led by Facebook co-founder Eduardo Saverin’s B Capital Group, existing investors Polychain Capital, Coinbase Ventures, Jump Capital, and Block.One among others.
Another reason for CoinDCX’s success has been that the Government of India and the RBI softened their take on digital currencies. The Supreme Court revoked the April 2018 circular issued by RBI in March 2020.
Additionally, the announcement of the phased introduction of sovereign-backed CBDC (Central Bank Digital Currency) by the RBI recently has created a path for wider acceptance of cryptocurrencies.
Furthermore, the coronavirus pandemic encouraged many investors to invest in cryptocurrencies for attractive returns
The road ahead
CoinDCX is focusing on new products with cutting edge innovation while improving its existing range of offerings. The startup is also looking at strengthening the product team and the exchange infrastructure to offer a more secure trading experience with instant liquidity to the investors.
The startup is also gearing up to launch CoinDCX Prime Initiative as its latest offering in the enterprise and HNI segment while providing safe and legally vetted investments as well as its global trading product, Cosmex.
In the next few years, CoinDCX would be focusing enhancing its trading platform features, however, remittance using crypto could be their next big thing.