The Bangalore based Indian Bitcoin company Unocoin has raised US$ 1.5 million in pre Series-A round. This is the highest amount of money raised for a digital currency company in India.
Money for Uncoin poured in from well known Indian venture capitalists like Blume Ventures, Mumbai Angels and ah! Ventures. International investors backing Uncoin include Digital Currency Group, Boost VC, Bank to the Future, Bitcoin Capital and FundersClub.
The Indian Landscape - Unregulated but holds promise
India is home to 1 billion plus people. It is also the world’s fastest growing economy with present and project GDP growth rate in excess of 7%. However, the Indian economy is dogged by huge inequality and is also home to world’s 21% unbanked.
While technically speaking Bitcoin should hold huge potential in a country like India, the truth is that there are several stumbling blocks. One of the major problems is that Bitcoin and other virtual currencies fall in the grey zone, as far as Indian regulations and law are concerned.
We talked with Sunny Ray, President of Unocoin about this issue and he mentioned a white paper by a leading techno-legal law firm, Nishith Desai and Associates which addresses these issues.
“In the absence of absolute clarity, Unocoin was the first company in India to seek out and work closely with Nishith Desai and Associates to implement a comprehensive compliance and banking like framework to address these challenges,” he further adds. “Over the coming years, we expect that Bitcoin will be regulated similar to how it is being regulated in other countries. Our aim is to work with people from academia, industry, and government of India to ensure that we continue delivering on the promises of Bitcoin while systematically protecting against the downside risks. When it comes time to implement a regulatory framework, due to pioneering efforts we've made in the community, we expect to help shape the future of this industry.”
Unocoin has the opportunity to transform Bitcoin in India
In 2015, India attracted inward remittances worth US$ 69 billion according to the world bank, which makes it the world’s largest remittance market. This is a huge opportunity for companies like Unocoin. There are other factors too that work in the company.
Sunny Ray says:
“The three main reasons that the Unocoin is excited about Bitcoin in India are:
- massive gold market
- the largest inward remitter
- the largest growing population of mobile/internet users.”
“When you couple these three points with the fact that Bitcoin in many ways enables you to become your own bank, you can see why Bitcoin is far superior to credit/debit cards,” he explains. “Unocoin recently released a Bitcoin point of sale application that allows merchants to accept Bitcoins and we auto-sell the Bitcoins and provide the merchant with INR in their bank account. This method of payment is both low cost (currently free) and irreversible (reduces the risk of fraud).”
Indeed, providing a feasible POS is important in India where even debit and credit cards have failed to make a headway. According to a report by India’s Mint newspaper the reason may lie in the non-acceptance of cards by merchants.
They quote Piyush Singh, Managing Director (Financial Services Group, Accenture India), as saying, “There is a lack of penetration of PoS machines. And even if there are machines installed, low-value transactions are discouraged by the merchants themselves. Then there are connectivity issues, which discourages consumers from using PoS terminals to make payments.”
So what will they do with this money?
The 1.5 million Dollar is what are the future plans of Unocoin. From what we have gathered their focus will remain squarely on the development of Bitcoin in India.
In order to develop this space they will need to address key challenges and bring Bitcoin into the mainstream consciousness of the Indian living in the hinterlands. This will be difficult and challenging but it is achievable.
Sunny Ray discloses his future plans, “We plan to now scale up our operations by investing in strategic technical hires and infrastructure, community development, expansion, sales and marketing, and more. Mainly, we plan to use these funds to invest in a series of innovative solutions that we're building on top of Bitcoin. Our overall aim is to make it easy to securely buy, sell, store, send and receive Bitcoin in India. To this end, we aim to develop industry leading services.”