2021 was a great year for Blockchain and Cryptocurrency startups in India. A total of $638 million was invested across industries in 48 rounds. According to reports, globally, the total funding in crypto and blockchain stood at $24.86 billion across 930 funding rounds.
Earlier in 2021, several successful blockchain projects came out of India. This includes Polygon, SoluLab, Instadapp, OpenXcell, Deqode, and others. Also, the year 2021, has seen a rising awareness and interest among retail investors to invest in cryptocurrencies and tokens. Thus it is normal for investors to have confidence in this growing developer ecosystem as the demand will rise more in the next few years.
Foreign investors into the booming ecosystem of Blockchain and Cryptocurrency
International funds such as Pantera Capital and Coinbase Ventures, and entrepreneur investors like Mark Cuban, have been actively investing in blockchain and cryptocurrency startups founded by Indians.
Adding to that, Andreessen Horowitz, the Silicon Valley-based venture capital firm also entered India this year through its investment in crypto selling platform CoinSwitch Kuber. Recently, San Mateo, California-based VC firm Draper Dragon has also set up an India practice. Furthermore, Antler India is looking to invest in 25-30 startups in the blockchain and Web 3.0 space in the next 2-3 years.
But, what about the Indian investors?
Many Indian investors are cautious due to the lack of a regulatory framework and the possibility of a blanket ban.
But still, many don’t want to miss the opportunity of early participation. For instance, Elevation Capital, Sequoia Capital India, and Kalaari Capital have backed several blockchains and crypto projects in India. This includes non-fungible token (NFT) projects, decentralized finance (Defi), as well as other ventures.
“The potential of the crypto and blockchain space is very evident. This is something we’ve been keenly looking to invest in”Vaas Bhaskar, Vice president at Elevation Capital
The absolute investment is still modest as high-growth Indian startups receive more. But it is notable with the interest of the large VC funds in backing some of these companies.
According to a Chainalysis report from October 2021, the Indian crypto market grew by 641% from July 2020 to June 2021. This development will help turn a region spanning central and southern Asia and Oceania into one of the world’s fastest-growing cryptocurrency markets, according to top experts.
However, the bulk of the capital this year was invested in crypto selling platforms, including CoinDCX and CoinSwitch Kuber. This helped both of the startups surpass valuations of $1 billion, making them unicorns.
According to experts, the Web 3.0 space, which encompasses decentralized tools and projects including NFTs, crypto exchanges, and protocols, will attract capital this year as well.