Crypto and blockchain startups in the country have seen unprecedented investor capital inflow from international ventures amid a booming developer ecosystem, rising awareness and interest amongst retail investors to invest in tokens and cryptocurrencies, and the emergence of successful projects like Polygon and Instadapp out of India.
Silicon Valley-based venture capital firm Andreessen Horowitz also entered India this year through its investment in crypto selling platform CoinSwitch Kuber.
San Mateo, California-based VC firm Draper Dragon has also set up an India practice and Antler India is looking to invest in 25-30 startups in the blockchain and Web 3.0 space in the next 2-3 years.
Indian investors are also starting to formulate plans for dedicated crypto funds and experiment with some investments.
Elevation Capital, Sequoia Capital India, and Kalaari Capital have backed non-fungible token (NFT) projects, decentralised finance (DeFi), as well as other ventures.
The Web 3.0 space, which encompasses decentralised tools and projects including NFTs, crypto exchanges, and protocols, is expected to attract capital next year as well, experts said.
India’s crypto market grew 641% from July 2020 to June 2021, helping turn a region spanning central and southern Asia and Oceania into one of the world’s fastest-growing cryptocurrency markets, according to a Chainalysis report from October.
The industry has flourished despite a proposed Bill seeking to ban “all private cryptocurrencies”.
The bulk of the capital this year was invested in crypto selling platforms, including CoinDCX and CoinSwitch Kuber, both of which surpassed valuations of $1 billion, making them unicorns.
Crypto exchanges have been using the unprecedented funding to expand their operations and splash out on advertising. In July, a case was filed against crypto exchanges WazirX, CoinSwitch Kuber and CoinDCX, urging India’s capital markets regulator to issue guidelines and take steps against such advertisements, which had run without standard disclaimers.
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