Defy, a cryptocurrency exchange, has raised $5.5 million (around Rs 40 crore) led by Goat VC, JAM Fund and Goodwater Capital, Bhagaban Behera, founder, Defy said in an interview to VCCircle on Wednesday.
The round also saw participation from Gemba Capital, Night Ventures, GMO Venture Partners, Olive Tree Capital, and existing investor Better Capital.
The fresh capital has been raised for parent company Walrus tech Inc, which runs a neo-banking platform.
“Right now, we are a team of 20. Over the next six months, we want to grow from 20 to 50. We are looking to hire people in the engineering, product design, growth, and marketing space. We aim to grow to a million users in the next six months,” said Behera.
He added, “We want to partner with influencers and use them as brand ambassadors to promote our product. We also want to build referral products for network effects. Here, we aim to bring in friends, and we think this will be a major acquisition channel for us.”
The company is transitioning from being a neo banking platform to a crypto exchange. Behera said, “Running a neo bank doesn’t mean that you have a digital banking license, and to build a good bank you still need help from traditional banks. So, if we wanted to build a disruptive product then there are way too many limitations, but in crypto space, within a month we can ideate and execute any ideas.”
“The crypto space also has enough gaps to build new products, and because of this we made this pivot” he added.
The platform is currently available for Android users on Google Playstore. Behera said they aim to build a social platform around crypto to make the subject considerably less intimidating. It allows users to create profiles and share their portfolios with friends and followers.
Over the last year, crypto-related startups have gained investor attention. Backers like Coinbase Ventures, WazirX, Hypersphere have remained active in the segment.
Crypto exchanges have also entered the much-coveted unicorn club with valuations higher than a billion dollars.
In August, CoinDCX raised $90 million (Rs 670 crore) in its Series C round led by Facebook founder Eduardo Savarin’s B Capital group, thus valuing the company at $1.1 billion
After CoinDCX, CoinSwitch Kuber announced a Series C funding round worth over $260 million, led by American venture capital (VC) firm a16z (Andreesen Horowitz) and Coinbase Ventures.
CoinSwitch and CoinDCX’s unicorn valuation came at a time when the crypto industry has been at loggerheads with the Indian government.
In June, the Enforcement Directorate (ED) issued a show-cause notice to WazirX, which is India’s largest crypto exchange by trading volumes. The notice accused the platform of violating exchange regulations in India with crypto transactions worth Rs. 2790 crore.
Meanwhile, cryptocurrency adoption has also been growing in India, despite regulatory uncertainties. According to an October report from blockchain research firm Chainalysis, the country ranks amongst the top three in the world in terms of crypto adoption, behind Vietnam. However, Chainalysis noted that Indian investors were more mature than those in Pakistan and Vietnam — the other two in the top three — with more institutional investors joining the market.