Not just capital: CoinSwitch Co-founder Ashish Singhal on launching a Web3 Discovery Fund
Ashish Singhal speaks to The Decrypting Story on making India a global development hub through Coinswitch's Web3 Discovery Fund.
The global crypto market cap continues to crumble amid mass sell-offs. Research from CoinMarketCap found that since August 15, the sector failed to break above the $1.2 trillion total market capitalisation, while October alone saw several hacks with over $718 million resulting in losses.
Despite these prevailing circumstances, crypto and Web3 startups in India have continued to attract investment. In keeping with this momentum, crypto unicorn launched a Web3 Discovery Fund in August to support over 100 early-stage startups in the country with the idea of being self-reliant rather than taking cues from companies elsewhere.
“Even today, global projects rely on Indian Web3 developer talent, so it's obvious that the community here will continue to be a hotbed for innovation. The fund is aimed at getting these ideas off the ground and allow them to access global capital and collaborations,” says Parth Chaturvedi, Crypto Ecosystem Lead, CoinSwitch
The crypto exchange has come a long way since 2017. Now, it wants to take everything it has learned to those in the ecosystem.
Ashish Singhal, Co-founder and CEO, CoinSwitch says in a conversation with The Decrypting Story, that he envisions India to be at the forefront of Web3 development. However, he knows that this seismic shift isn’t possible by a single crypto exchange or firm.
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Setting on a different path
While there are several other VC firms launching funds, Ashish claims this one is different. “We do not want to just be providers of capital,” he says.
He envisions the Discovery Fund operating more proactively, helping entrepreneurs seek not just capital but also the right expertise and mentorship to shape their ideas. To this end, it has roped in Buidler's Tribe, a web3 startup incubator, to strengthen ecosystem connections.
Finding the right fit
For now, the focus is to get in at the early stage. “We are looking at only till Pre-Series A. But being a new, niche sector, it requires a lot of ecosystem support for founders to realise their true potential. We want to be that bridge between founders and broader ecosystem collaborations,” Parth adds.
The process of selecting a startup is lengthy—first, the CoinSwitch team picks up on startups from events like incubators, demo days, pitch fests, and hackathons. Then, the next step is to interact with the founders to gain a better understanding.
As far as selection goes, there is a greater focus on the strengths of the founding team, their past experiences of building a startup as well as its own business ability to maintain competitive advantages. “Post that we try to understand the problem statement for which the project is trying to solve, potential TAM and execution moats,” Parth says.
“Since most projects are closer to ideation than execution, our primary investing thesis is centred around the strength of the founding team,” he adds.
Parth asserts that CoinSwitch actively tracks the given startup's growth and stays in close contact with the team “to make sure there's no lagging from the founders,” he adds.
In this process, it has interacted with more than 80 early-stage Web3 startups which are in different stages in terms of team size, ranging from 5 members to 30 members.
For matters concerning assessment and evaluation, it has a dedicated internal team consisting of directors and crypto-native product managers, following which a detailed investment thesis is prepared.
As far as funding goes, it’s a mixed bag. While the cheque sizes could differ depending on the startup, it could start at anywhere from $50,000 and could go up to $250,000 if it is an exceptional project.
Post the evaluation, these startups get access to global venture capital firms like Tiger Global, Ribbit Capital, Coinbase Ventures, Sequoia Capital India, Woodstock Fund, and Elevation Capital.
“The idea is to showcase interesting projects to the global marquee VC names, which might not have on-ground visibility for such early-stage projects. Even in India, we are trying to highlight the most relevant startups to traditional Web2 VCs, as their interest in the Web3 space also increases,” Parth adds.
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Which sectors does CoinSwitch have its eye on?
According to Parth, blockchain-based gaming has become a very popular theme and is focussing on NFT and Metaverse-related projects.
As for what doesn’t hit the mark at the moment, projects that place an emphasis on Decentralised Finance (DeFi). According to Parth prevailing market conditions, have slowed down these types of projects. While this is the case, they haven’t ruled out DeFi completely yet.
“There is unique innovation happening in the DeFi space that keeps us excited about future prospects,” he adds.
The team is strongly betting on projects that work on web3 infrastructure like wallets, staking, custody related startups. “Web3 infra startups have a solid theme, especially during bear markets, because this is the time where fundamental rails for the next bull run are being built and it has a greater potential,” he concludes.
Edited by Akanksha Sarma