Unocoin raises funds from Tim Draper in a targeted $5 mn round
Venture capitalist Tim Draper of Draper Associates, an early backer of companies such as Twitter, Skype and Tesla, has led the latest funding round in Bengaluru-based Unocoin Technologies, which runs cryptocurrency exchange Unocoin.
Financial terms of the deal were not disclosed.
The Series A funding round, which looks to raise a total of $5 million at a valuation of $20 million, will see participation from XBTO Ventures and 2020 Ventures, apart from other veteran investors in the segment. The round is expected to close by October end, co-founder and CEO Sathvik Vishwanath told TechCircle.
The fresh capital, he said, would help the startup scale its business further and expand the platform’s offerings.
“We will double down on our efforts to improve our product features and offerings, which will enhance the overall usability and functionality for our customers,” Vishwanath said. The developments in its pipeline include expansion into Decentralised Finance (DeFi) with its own protocols and the implementation of a new artificial intelligence-based chatbot system to improve customer support.
The development comes months after the Supreme Court lifted the RBI Crypto ban in March. Post the verdict, Unocoin saw its customer base surge ten-fold in the very first month, while transaction volumes went up five-fold. In fact, daily signups increased from 40-50 to 300 a day, the company said.
In a statement, Draper said: “We were delighted to hear the verdict by the Indian Supreme Court, and we had been tracking Unocoin, the leader in India for bitcoin, for years. We are so thrilled that the stars aligned and we could finally back Unocoin... It is a great way to do business in a currency that doesn’t devalue over time."
Interestingly, this is not the startup’s first association with the American venture capitalist. In 2015, it was incubated by Boost.VC, which is run by Draper’s son Adam. Additionally, Draper is a limited partner in Blume Ventures, a key investor in the startup since 2016.
The startup has raised $3 million so far from Blume Ventures, ah! Ventures, Bank to the Future, Bitcoin Capital, Dream Incubators and Founders Club in bridge funding rounds, dubbed pre-Series A rounds.
Founded in 2013 by Vishwanath, Harish BV, Abhinand Kaseti and Sunny Ray, Unocoin went on from being a pure play cryptocurrency exchange to introducing several fintech products, such as merchant gateways, crypto lending, bitcoin systematic buying plan (BSP), crypto interest earning, bitcoin point-of-sale (POS) app and bitcoin over-the-counter trading.
At its peak in December 2017, Unocoin had processed transactions worth more than Rs 2 billion in a month for over 13,00,000 customers.
However, the company has faced its fair share of roadblocks on its way. In the past two years, Unocoin has been in news for trimming its workforce, even as its co-founder and COO Harish BV was arrested for running a bitcoin trading kiosk while crypto startups were fighting regulatory hurdles.
The startup recorded revenue and profit of Rs 20.47 crore and Rs 2.6 million, respectively, in FY18. In FY19, it saw its revenue fall to Rs 4.5 crore and witnessed a loss of Rs 6.4 crore, according to data sourced from VCCEdge.