Coinbase funding not a step towards merger, funds are for Middle East growth: CoinDCX CEO

Instead, CoinDCX plans to use new financing for the first time in more than three years to expand its presence in the Middle East and expand beyond its cryptocurrency exchange business. Sumit Gupta, co-founder and CEO, said: Mint. CoinDCX also did not disclose the amount it received from Coinbase, saying only that it was valued at $2.45 billion after fundraising.

“The new fundraise is not a step towards consolidation of services,” Gupta said. “While Coinbase has deep expertise in global markets, CoinDCX remains one of India’s largest cryptocurrency exchanges. Our aim with this round is to expand our services to global markets, including the Middle East, where the cryptocurrency adoption market is large and growing rapidly.”

“Since Coinbase is a publicly traded entity in the US, we are currently going through the mandatory regulatory clearance process. Once the SEC (US Securities and Exchange Commission) approves this, we will seek to disclose more details regarding our latest round,” Gupta added.

Ups and downs

Operating under holding company Neblio Technologies Private Limited, CoinDCX launched in April 2018 and most recently raised $135 million in April 2022 from investors including Coinbase at a $2.15 billion valuation. The company has raised a total of $244 million to date, not counting Wednesday’s fundraising.

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 introduced a 30% income tax on crypto earnings and a 1% tax deduction at source (TDS) on all crypto transactions above a certain size. Crypto exchanges like CoinDCX lost massive amounts of customers overnight, with daily trading volumes falling more than 95% from their 2021 peaks.

CoinDCX claims to have 20 million registered users as of October 15. last year ended ₹560 crore revenue and ₹It made a profit of 1.7 billion. The company expects to more than double its revenue ₹1,180 crore in the current financial year, a spokesperson said.

“We now aim to increase the revenue contribution of our non-crypto exchange operations, such as our decentralized finance (defi) crypto wallet offering, as well as bring further innovations in blockchain for enterprise web3 adoption. We are already doing all of this, and the new capital adequately prepares us to grow and invest in our business in the near future, as well as expand in the Middle East,” Gupta said. he said.

Although Gupta did not announce a separation, he said CoinDCX’s Indian exchange operations “contribute a large portion of our revenue and new ventures are now contributing double digits.”

“India remains one of the largest crypto trading markets by number of users and we will continue to focus on our crypto exchange operations there as we expand in the Middle East. Current funding gives us space to deal with regulatory uncertainty. We are also seeing more people realizing the value of cryptocurrency investment and joining the crypto bull run alongside traditional assets such as gold and silver. None is forever.” It may not last, but there is strong interest and we are here. “To provide service to users,” he said.

Are regulatory winds changing?

Industry stakeholders said the company remained on stable ground despite the $44 million hack in July and was poised to benefit from global regulatory headwinds.

Shatrajit Banerji, partner at law firm Cyril Amarchand and Mangaldas, said: “From a regulatory perspective, there are positive moves globally that are boosting investor confidence. Since cryptocurrencies, unlike equity markets, are globally interconnected, the rise of pro-cryptocurrency policies will mean that retail users in India will look at the potential for similar moves in India and that This means that it will consider the area as a particularly suitable investment option. I’m going through a bull run.”

Dilip Chenoy, president of industry body Bharat Web3 Association (BWA), added that the Indian market is seeing significant activity. “India’s crypto market has already raised more than $3 billion in cumulative investments. Even last year, publicly available data suggested that India-led startups serving global markets had net investments of over $500 million in the last calendar year, indicating global confidence in Indian startups. Besides this, virtual asset valuations have also increased nearly 5 times in the last one year. Taxation issues are both individual and While it continues to create problems at the corporate level, the market is ripe for new investments. “We need innovative blockchain startups to raise significant global funding,” he said.