[The Turning Point] How cryptocurrency unicorn CoinDCX was started to build a centralised platform
The Turning Point is a series of short articles that focuses on the moment when an entrepreneur hit upon their winning idea. Today, we look at CoinDCX, the first Indian cryptocurrency exchange to reach the unicorn status.
Cryptocurrency, which was unheard of until a few years ago, has now become an important and rising element in today’s digital economy. Surrounded with scepticism, resistance, and sensationalism, it is now red hot, with becoming the first Indian cryptocurrency exchange to reach the unicorn status.
CoinDCX was started in March 2018 by IIT-Bombay graduates Sumit Gupta and Neeraj Khandelwal who wanted to build a centralised platform to trade from. In just three years, the startup entered the unicorn club with a valuation of $1.1 billion, after it raised Series C funding of $90 million in August.
The Mumbai-based startup is an aggregator of cryptocurrency trading services. The platform helps users trade cryptos with high-security levels and verified information. Since its inception, the startup claims to have onboarded more than 4 million users. It will now carry forward the vision of making crypto accessible in India and accelerating its efforts towards bringing 50 million Indians into crypto.
How it started?
Sumit and Neeraj had known each other since 2007. They first met in Kota, Rajasthan, while preparing for their IIT entrance exams, and became good friends and worked their way into IIT-Bombay. They were also inclined towards entrepreneurship.
After college, Neeraj ventured into his family business to understand the nuances and challenges of being an entrepreneur. Post this, he joined hands with many startups to drive their technical architecture. Sumit joined an MNC in Tokyo, which he says, ‘helped him to understand the technicalities and culture within a corporation’.
In 2014, when Bitcoin was gaining traction, Sumit was introduced to distributed ledger technology. He realised that blockchain traders have to keep up with thousands of crypto trades in seconds, and there was no platform to trade from. He then got the idea of bringing together various decentralised marketplaces and cryptocurrencies, which are the medium of transaction in these marketplaces. He then contacted his friend Neeraj, and both collaborated to close the key market gaps between this new technology and consumers globally.
In 2018, after studying the market and the future of crypto technology, Sumit and Neeraj launched CoinDCX.
“In case of a trading platform like CoinDCX, the key competitive advantage we wished to have was to develop an advanced trading terminal that outperforms any current offering available to traders on the market. In addition to the challenges on liquidity (we initially faced), the other big challenge was to connect fragmented cryptocurrency capital markets within a single trading terminal,” Sumit had told YourStory in an earlier conversation.
According to the founders, the company has developed a single-point access to trade all the cryptocurrency instruments available in more than 500 markets. It claims to have built a highly scalable trade machine engine, which can handle up to one million transactions per second. CoinDCX charges a transaction fee on every transaction or trade made on the platform.
Despite regulatory hiccups pertaining to cryptocurrency in India in the last three years, CoinDCX has grown leaps and bounds, and what helped the company get on track was focussing on building the product from day one.
Neeraj explains, they started with a simple idea -- to let people buy and sell cryptocurrencies. But the platform now offers margin trading, derivatives, lending, and borrowing - financial products that add more value to the users.
“We have seen several ups and downs in our journey. What helped was keeping our heads down, focussing on what we had to do, and building the platform. The crypto space is a new one with several uncertainties. One year in crypto is three years in any other sector. So now, our focus is to enhance the product and make it more simple, safe, and compliant,” said Sumit in a conversation with YourStory Founder and CEO Shradha Sharma.
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Edited by Megha Reddy