The chief executive of CoinDCX has denied rumours that it plans to merge with Coinbase after the US crypto company announced it had invested an undisclosed amount in the Indian cryptocurrency platform.
Rather, CoinDCX plans to use the fresh funding – its first in more than three years – to expand its presence in the Middle East and venture beyond the cryptocurrency exchange business, Sumit Gupta, its co-founder and chief executive, told Mint. CoinDCX also did not disclose the sum it received from Coinbase, saying only that it was valued at $2.45 billion after the fundraise.
“The fresh fundraise is not a step toward a merger of services,” Gupta said. “Coinbase has deep expertise in global markets, while CoinDCX remains one of India’s largest cryptocurrency exchanges. With this round, our goal is to expand our services to global markets including the Middle East, where the market for cryptocurrency adoption is large and growing fast.”
“We’re currently going through obligatory regulatory clearance, since Coinbase is a publicly listed entity in the US. Once the SEC (US Securities and Exchange Commission) clears it, we’ll look to divulge more details of our latest round,” Gupta added.
Ups and downs
CoinDCX, which operates under holding firm Neblio Technologies Private Limited, started operations in April 2018 and last raised $135 million from investors, including Coinbase, in April 2022 at a valuation of $2.15 billion. The company has raised a total of $244 million to date, not counting Wednesday’s fund-raise.
In July 2024, CoinDCX acquired Dubai crypto exchange BitOasis for an undisclosed sum. The company had launched a web3 wallet in August 2022, months after India imposed a 30% income tax on crypto earnings and a 1% tax deducted at source (TDS) on all crypto trades above a certain size. Overnight, crypto exchanges such as CoinDCX lost large chunks of customers and daily trading volumes fell more than 95% from their 2021 peaks.
CoinDCX claims to have 20 million registered users as of 15 October. It ended last year with ₹560 crore in revenue and ₹1.7 crore in profit. The company expects to more than double revenue to ₹1,180 crore in the current fiscal year, a spokesperson said.
“We’re now looking to step up the revenue contribution of our non-crypto exchange operations, such as our decentralised finance (defi) crypto wallet offering, and also bring forth more innovations on blockchain for enterprise web3 adoption. We’re already doing all of this, and the new capital sufficiently sets us up to expand and invest in our business for the immediate future—alongside expanding in the Middle East,” Gupta said.
While Gupta did not divulge a break-up, he said CoinDCX’s India exchange operations “contribute the majority part of our revenue—with new ventures now making double-digit contributions”.
“India remains one of the largest crypto trading markets by number of users, and while we expand in the Middle East, we’ll continue to focus on our crypto exchange operations here. The current funding gives us room to navigate regulatory uncertainty. We’re also seeing more people realise the value of cryptocurrency investing and participate in the crypto bull run, as well as conventional assets such as gold and silver. None of them may last forever, but there is strong interest and we’re here to serve users,” he said.
Regulatory winds changing?
Industry stakeholders said the company remains on stable ground despite suffering a $44 million hack in July, and stands to benefit from global regulatory tailwinds.
Shatrajit Banerji, partner at law firm, Cyril Amarchand and Mangaldas, said, “From a regulatory standpoint, there are positive moves globally that boost investor confidence. Since cryptocurrencies, unlike equity markets, are linked globally, a surge of pro-cryptocurrency policies mean that retail users in India will look at the potential for similar moves in India—and consider the field as a viable investment option especially when it is going through a bull run.”
Dilip Chenoy, chairman of industry body Bharat Web3 Association (BWA), added that the India market is seeing considerable activity. “India’s crypto market has already raised more than $3 billion in cumulative investments. Even last year, public data suggested that Indian-led ventures catering to global markets drew net investments of over $500 million last calendar year—showing global trust in Indian ventures. Alongside, virtual asset valuations have surged nearly 5x in the past one year. While the taxation issues continue to plague at both individual and institutional level, the market is ripe for innovative blockchain ventures to raise substantial global funding,” he said.
