[Funding alert] CoinSwitch Kuber turns unicorn; raises $260M from a16z, Coinbase Ventures, and existing investors

Indian crypto exchange CoinSwitch Kuber has announced its $260 million Series C round of funding from Andreessen Horowitz (a16z), Coinbase Ventures, and existing investors Paradigm, Ribbit Capital, Sequoia Capital India, and Tiger Global.

With a valuation of $1.9 billion, CoinSwitch Kuber becomes the second Indian crypto startup to enter the unicorn club, after CoinDCX became the first in August 2021. The new round brings CoinSwitch's total funding to over $300 million.

a16z is a global, leading venture capital firm known to back bold tech entrepreneurs, and Coinbase is an early pioneer in creating crypto economies and operating one of the world’s largest crypto exchanges.

Ashish Singhal, Co-founder and CEO, CoinSwitch Kuber, said:

“We wanted to remove all the complexities in crypto trading, educate consumers and give them a simplified experience of one-click buy and sell in crypto. We are humbled by the trust shown in CoinSwitch Kuber by two of the biggest names in the global crypto investment arena with Andreessen Horowitz choosing us to be their first investment in India."

"Coinbase Ventures’ investment is also testimony to the confidence they have in CoinSwitch Kuber’s business model and the tremendous potential India’s crypto space has to offer," he added.

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The way ahead for CoinSwitch

CoinSwitch Kuber claims to have over 11 million registered users, making it the country's largest crypto platform. It has over seven million active users with a monthly transaction volume of Rs 15,138 crore.

The platform plans to utilise its Series C funds for onboarding 50 million users, introducing new crypto products such as lending and staking, hiring leadership and talent, adding new asset classes, onboarding institutional investors/clients, launching an ecosystem fund, and building crypto awareness and education.

“We are incredibly excited about the crypto market opportunity in India, and with its breakout growth, CoinSwitch has emerged as the leading retail platform in the country,” said David George, General Partner at Andreessen Horowitz. “Ashish and the team have demonstrated strong execution abilities and the ambition to deliver an investment platform for the masses in India.”

Why it matters?

Investor confidence in CoinSwitch comes at a time when the Indian crypto market awaits regulatory clarity from the local government on investing in and trading crypto.

In 2013, a16z invested $25 million in Coinbase at a time when crypto companies in the US were finding it difficult to move forward amidst lack of clear regulation and inability to find bank partners. Coinbase went to give a16z its biggest exit yet when it went public earlier this year.

Now, a16z and Coinbase's investment in CoinSwitch in India is taking place amidst a situation similar to the US in 2013.

In an upcoming bill, the government is likely to define crypto and compartmentalise virtual currencies on the basis of their use cases.

Earlier, it was thought the government would mandate all private cryptocurrencies, except any virtual currencies issued by the state, to be prohibited in India. In recent months, the likes of HDFC Bank, ICICI Bank, SBI and other banks have been breaking up with or scaling down their transaction support for crypto exchanges.

However, investor confidence and inflow of foreign investment from a16z and Coinbase could be an indicator of a bullish outlook towards the future of India's crypto market.

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The a16z edge

CoinSwitch becoming a16z's first investment in India is a landmark moment for the nation's nascent crypto industry as the Silicon Valley-based VC fund is an investor in 17 companies that have gone public above $1 billion. Coinbase, Facebook, Airbnb, and Roblox are among the highest valued.

a16z has been betting that rising interest in crypto can continue to lead to high profile exits.

In June 2021, it announced its third crypto-focussed fund worth $2.2 billion, which it said is for the “next generation of visionary crypto founders.”

Some of its partners wrote in a blog post about the new fund and said, "We are still at the very early stages of what is possible. The size of this fund speaks to the size of the opportunity before us: crypto is not only the future of finance but, as with the internet in the early days, is poised to transform all aspects of our lives.

More about CoinSwitch Kuber

CoinSwitch Kuber's existing investors are Paradigm, Tiger Global, Sequoia Capital India, and Ribbit Capital, which have valued the crypto exchange at over $500 million in its Series B fundraising round in April 2021. In just six months, its valuation has increased 4x.

CoinSwitch was founded in 2017 by Ashish Singhal, Govind Soni, and Vimal Sagar Tiwari in Bengaluru.

In April 2021, the platform had over 4.5 million users in India, and recorded $5 billion in transaction volume in March 2021. Since then, it has reportedly reached over 11 million users and competes with the likes of CoinDCX, ZebPay, WazirX, and Unocoin.

A recent statement shared by the exchange added, "The platform is witnessing high volumes from the millennial and Gen-Z population, with almost 75 percent of its user base between the ages of 18 and 35, and the average age being 24. Over 55 percent of users on the platform hail from Tier II and III cities."

The exchange also said the average crypto investment on its platform is about Rs 9,000 per month per user, with investors in Tier I cities making larger trades over smaller towns. In Tier I cities, the average monthly ticket size is about Rs 11,600, Rs 6,600 in Tier II, and about Rs 3,500 per user in Tier III cities.