How CoinSwitch Kuber got its mojo back after RBI’s 2018 ban

CoinSwitch Kuber,
one of India’s two crypto unicorns, was born out of a simple idea – to make crypto investing as easy as possible. Founded by three friends in June 2017, the company had to shift out of India the following year, when the Reserve Bank of India banned banks from entertaining customers who dealt in virtual currencies. After the Supreme Court overturned the ban in March 2020, CoinSwitch pivoted quickly and by October 2021 was worth more than $1 billion.

Here’s the story of how the company came to be and where it’s headed.

The idea

“We created CoinSwitch Kuber with a simple objective — to get crypto to every Indian with simplicity, and at just Rs 100. Today, with the click of a button, you can invest in crypto like you order food online. And you can start with just Rs 100. This was the objective, says Ashish Singhal, CEO and cofounder of Coinswitch Kuber, a crypto exchange aggregator and one of two crypto unicorns in India.

The journey
Its rise has been meteoric. What started as a side project between three friends – Singhal, Govind Soni and Vimal Sagar Tiwari – in 2017 has grown into a $1.9 billion company. The firm claims to have acquired 14 million users in 20 months of its launch in India. More recently, CoinSwitch raised over $300 million from global venture capital firm Andreessen Horowitz, backer of Uber and Facebook; Sequoia, which placed early bets on Google, Cisco and Apple; and Tiger Capital, which invested in ByteDance and Flipkart.

In a statement on December 28, 2021, the company said, “Catering primarily to retail investors, CoinSwitch registered a 3,500% rise in transaction volumes as more Indians started their crypto investing journey as crypto-assets became mainstream worldwide.”

The company claims 60% of its users are below the age of 28 and more than half live outside metro cities.

Based out of Bengaluru but headquartered in Singapore, CoinSwitch Kuber employs about 400 people and plans to increase this number to 1,500 in the next few years.

Recalling the time when the team, built to enrol 100,000 users in six months, had to be scaled quickly to cater to 1.7 million users in the same period, Tiwari said, “You wake up in the morning and you see that everything has changed.”

India’s crypto craze

In gold-crazy India, the euphoria over crypto – with its notorious volatility and no investor protection –- has baffled many.

But India’s central bank wants nothing to do with it. Reserve Bank of India (RBI) governor Shaktikanta Das has time and again reiterated the bank’s aversion to crypto, saying it poses
“a serious concern to the RBI from a macroeconomic and financial stability standpoint”.

The central government has twice hinted at tabling legislation to govern crypto, but is yet to do so, increasing uncertainty among crypto companies, investors and other stakeholders.

Singhal, when asked about impending legislation and its impact on the growth of his company, said, “I think it’s very positive. If crypto gets regularised in India, many people who are staying away from crypto, for now, will definitely want to be part of this ecosystem.”

Crash, boom, bang

Despite the crash in cryptocurrencies in early 2022, which wiped out $1 trillion in market cap at one point, many young Indians seem convinced of its upside potential.

So while the central banks and governments across the world, including China, and institutions such as the International Monetary Fund (IMF) dismiss crypto as worthless at best and dangerous at worst, young India’s love affair with these digital assets continues to deepen.

Tiwari said, “Everyone in this team knows that they are actually solving their own problems, because we all belong to the same society. Who does not aspire to build wealth? But they did not have a platform where they could easily do it, right? So everyone in our team is actually building not for India, not for somebody else, but only for themselves. And if you’re building something for yourself, we know that it will eventually be built for everyone in the country.”

Singhal added, “Today, our goal is to make money equal for all. We believe that crypto was a first step in that direction – trying to provide access to crypto across India.”

The team
Friends since their college days, Singhal and Soni met at Netaji Subhash Institute of Technology at Noida, where they studied computer science. Both went on to work at Amazon.

Tiwari was a common friend who studied at Jaypee Institute of Tech in Noida and worked at Accenture. The computer science engineers have known each other for 14 years and won major hackathons in India, including those by Sequoia, Google and Amazon.

Soni, the chief technology officer, spoke about the team’s dynamics.

“Ashish, he’s deep into problem-solving, always obsessed about the smallest thing and thinking big. Vimal is really kind-hearted and always puts people first, ensuring that customers are happy, the team is happy. And I am the tech guy.”

They are neither flashy nor brash, just quietly confident in their ability to move the needle, to shift the status quo.

Soni is from Bikaner in Rajasthan while Tiwari and Singhal were born and raised in Uttar Pradesh, one of India’s poorest states, where the lack of opportunities was keenly felt but did not tarnish dreams.

‘Kuch toh badlega
’

Singhal said, “In my childhood, I was too much into sports to start with, and then kind of shifted towards studies because I realised what it could mean for me and my family if I did well.

“I don’t come from a very affluent family. But my parents did everything in their power to give me one of the best lives I could imagine. I realised then that there is a lot of asymmetry in terms of opportunities given to different people.

“Today, when I look back on my background, I realise why making money equal for all is my mission.”

The company’s tagline, “Kuch toh badlega” (something will change), encapsulates this drive.

The long road

While change has come, and has been dramatic, the road hasn’t been easy for Coinswitch Kuber and its three founders.

“I can remember a time in 2017 when no one would even talk to us. If we said we were from a crypto company, they would treat us like criminals,” said Singhal.

In 2018, the rookie venture was forced out of India when the country’s central bank banned banks from entertaining customers who dealt in virtual currencies. The Supreme court eventually overturned the ban in March 2020.

“We always wanted to build what we built in 2020, back in 2018 itself, but there was a major pushback. But we pivoted, we became a global aggregator and succeeded,” said Singhal.

Just as the company was celebrating its early success, in February 2021 the Indian government announced it was coming out with a bill to ban cryptocurrencies. The state dithered, and the legislation was listed for tabling once again in November 2021. Once again, the state blinked and deferred the bill.

India’s crypto lobby, meanwhile, has been hard at work, welcoming regulations so long as they don’t choke innovation, reaching out to the government and investors, and pushing the benefits of blockchain-based innovation to the larger economy.

But as crypto exchanges have become more visible, many have questioned the legitimacy of these fast-growing businesses, and whether they can actually be called ‘exchanges’ at all.

Unlike the BSE or the National Stock Exchange (NSE), crypto exchanges are not supervised by a regulator such as the Securities and Exchange Board of India (Sebi).

It’s unclear whether they assume counterparty risk and eliminate transaction risk, something that the two main Indian stock exchanges offer. The lack of regulations also means that if the market tanks, investors will be left high and dry with nowhere to turn to.

The future

Amid increasing calls for clear rules for crypto exchanges and investors, CoinSwitch Kuber is surging ahead with its plans. Over time it aims to diversify into a wealth tech startup that deals in Indian and US stocks, mutual funds, fixed deposits and bonds.

Call it derisking or expansion, the team at Coinswitch Kuber has its sights set high.

Note: Crypto products and non-fungible tokens are unregulated and can be highly risky. There may be no regulatory recourse for any loss from such transactions. According to the ASCI guidelines, the words “currency,” “securities,” “custodian” and “depositories” may not be used in any content of virtual digital asset products or services because consumers associate these terms with regulated products.