Indian cryptocurrency exchange Unocoin said on Thursday it has raised an undisclosed amount of funding from US-based venture capital fund Draper Associates, with participation from XBTO Ventures and 2020 Ventures. This is part of its ongoing Series A round of funding in which it’s looking to raise USD 5 million at a valuation of USD 20 million.
Unocoin has previously raised over USD 3 million from Digital Currency Group led by Barry Silbert, Boost.vc led by Adam Draper, and Blume Ventures.
The seven-year-old company allows Indian users to buy and store bitcoins as well as trade in other cryptocurrencies such as Ethereum, Litecoin.
Unocoin said it will use the fresh funds to develop new products, enhance existing infrastructure, and build a stronger technology team. It also plans to create its own protocol to expand into Decentralized Finance (DeFi) and implement a new AI-based chatbot system to improve customer support.
Two years ago, India’s apex bank, Reserve Bank of India (RBI) banned trading in cryptocurrencies, causing a huge setback to a handful of startups that had built exchanges amidst a rising interest in the digital money. However, seven months ago, the Supreme Court of India struck down RBI’s ban allowing startups to resume their services.
Sathvik Vishwanath, CEO of Unocoin said that in the month following the lifting of the ban, customer growth rates surged more than tenfold, accompanied by a fivefold increase in trading volumes in subsequent months.
“The funding will help us scale our business further and give us a strong financial foothold to expand our 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.
Unocoin competes with a handful of cryptocurrency exchanges such as WazirX, CoinDCX, CoinSwitch, among others.
Larry Sukernik of Digital Currency Group Investments, one of Unocoin’s backers, said that it’s a tough business to run a cryptocurrency exchange. “Running a cryptocurrency exchange in India is an even tougher business,” he added. “The fact that Unocoin survived and thrived is a testament to the team’s ability and grit. We can’t wait to see what’s next for them.”