Blockchain 2nd fastest growing startup subsector globally: Report

With a 121 percent increase in Series A deals over a five year period, blockchain technology has emerged as the second fastest-growing startup sub-sector globally, as per the Global Startup Ecosystem Report 2021 (GSER).

Blockchain was ranked second just behind agritech and new food tech, which saw a 128 percent increase in Series A deals over the same period.

Further, the report found 10 percent of global startups are working on or using blockchain technology in some form.

The GSER, which surveyed over 10,000 global startup execs, divided startups into growing, matured and declining subsectors. It placed blockchain technology in the growing group alongside advanced manufacturing and robotics, AI and Big Data and fintech.

The matured group included cybersecurity, edtech, cleantech, life sciences and gaming while the declining group comprised adtech and digital media.

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In India, investments in the blockchain and crypto space look likely to pick up despite a lack of clear, regulatory framework on the classification of cryptocurrencies and the way forward for innovation blockchain.

Although it is past its Series A round and would not feature in the GSER's sample, India's leading crypto exchange CoinSwitch Kuber is reportedly in advanced talks to raise a new round of funding at up to $2 billion in valuation.

This would make CoinSwitch the second Indian crypto startup to enter the unicorn club, after CoinDCX became the first in August 2021.

The TechCrunch report, which cited anonymous sources familiar with the developments, added the CoinSwitch deal will be worth over $100 million.

India and its startups are also now better poised to capitalise on the global trend for innovation in blockchain technology. With a robust pool of tech talent, vibrant startup community and improving digital infrastructure, it could become a forerunner in the segment.

Several Indian blockchain startups such as Polygon (previously Matic), EPNS (Ethereum Push Notification Service), InstaDApp and DeFi 11, among others, as well as crypto exchanges like CoinSwitch Kuber, CoinDCX, WazirX, ZebPay etc are leading the movement in India.

However, the uptake of blockchain technology among Indian startups could accelerate even further if local policies and laws are made conducive to innovation in blockchain.

The Indian government is reportedly planning to define crypto and compartmentalise virtual currencies on the basis of their use cases. Finance Minister Nirmala Sitharaman recently said the government "has to be cautious but will think it through."

Earlier, it was thought the inter-ministerial panel on cryptocurrency under the Chairmanship of Secretary (Economic Affairs) had recommended that all private cryptocurrencies, except any virtual currencies issued by the state, will be prohibited in India.

These developments come against the backdrop of rising adoption of crypto in India. An August 2021 report by blockchain data platform Chainalysis ranked India second in terms of global crypto adoption in 2021, amidst global crypto adoption rising over 880 percent in the last year.