COINDCX Case Study-How did it become the Leading Crypto Trading Platform in India?

1. Overview

According to a recent survey, India is the fastest growing cryptocurrency market in the world with 10 million+ online trading on a day-to-day basis. The Indian population, especially the younger population has been increasingly invested in the idea of trading digital currencies known as Cryptocurrency as compared to traditional stocks & bonds. Now, if you are wondering what a cryptocurrency is? Well, Cryptocurrencies are digital currencies that represent a variety of precious and intangible objects which could be used for different applications and networks, such as social media platforms, digital games, virtual worlds, peer-to-peer networks, etc.

However, despite being one of the most traded currencies on multiple cryptocurrency trading platforms, there was a lack of simplified, secured & user-friendly platforms to enable the user to invest in cryptocurrency, making people reluctant to make use of these platforms. Therefore, to ease the problem, CoinDCX was started in March 2018 by IIT-Bombay graduates Sumit Gupta and Neeraj Khandelwal who wanted to build a centralized platform to trade from.

CoinDCX is India’s biggest and safest cryptocurrency exchange brand offering crypto-based financial services across the nation and is hailed as “India’s biggest cryptocurrency exchange” and one of the first ISO-certified Crypto Exchange platforms. Presently, the CoinDCX platform has more than 10M users who undertake more than 15M transactions daily. After raising a sum of $90 million in a Series C funding round in August 2021, the crypto start-up entered the unicorn valuation club at a valuation of $1.1 billion and was the first start-up to become a unicorn in the crypto segment.Read further to find out more about the CoinDCX start-up, its founders, start-up story, funding & investors, mission & vision, growth & challenges faced, plans, and many more!

Company Profile

Name- Neblio Technologies Pvt Ltd (CoinDCX)

Founded – April 2018

Headquarters- Mumbai, India

Website- www.coindcx.com

Funding -$244M (2022)

Employees- 251-500

Valuation-$2.15B (as on April 2022)

Revenue- $4.86M (38.9 Crores in FY21)

Founders-Sumit Gupta and Neeraj Khandelwal

Sector- Technology

Industry- Software & Tech Services

2. CoinDCX- About & How It Works?

The global cryptocurrency market has been known to exceed a valuation of $1782 billion in 2021 and is expected to grow at a CAGR of 58.4% reaching around $32420 billion by the year 2027. Similarly, the Indian Crypto industry in India is reaching touch a valuation of $241 mn by 2030, as of December 2021, which means that the industry has huge growth prospects for the coming years.

Therefore, CoinDCX is a start-up that offers cryptocurrency cross–border financial services for making deposits & trading cryptocurrencies with its quick, efficient & secured platform with features like faster liquidity, and the availability of a powerful wallet coupled with an impenetrable security system with the use of robust technologies. All the services offered through the platform have been tailored to suit the appetite of traders by taking into account their trading history, risk tolerance, and frequency of trading. The start-up launched its trading platform CoinDCX Go in January last year, as a means to allow its users to legally purchase cryptocurrencies like Bitcoin& other common cryptocurrencies such as Ethereum (ETH), Bitcoin Cash (BCH), Litecoin (LTC), Binance Coin (BNB), Chainlink (LINK), EOS (EOS), Tether (USDT), Cardano (ADA), Stellar Lumens (XLM), Ripple (XRP), Basic Attention Token (BAT), Matic Network (MATIC), Tron (TRX), etc. among others in a single click.

Since its inception, the startup has met with tremendous success and popularity with more than 10M+ users. Further, the crypto start-up is working to make trading in crypto simpler & accessible in the country and even bring 50M + Indian users to CoinDCX by the end of the year and allow them to access a variety of industry-first products enabling trade using exchange liquidity.

3. CoinDCX – Mission and Vision

The company’s mission is to democratize finance and make investing more available to the general public by trading through CoinDCX.The start-up business tagline says ‘Your Gateway to Crypto’ which has been carefully chosen to imply the secure & user-friendly platform to start crypto trading for its users. CoinDCX is on a mission to offer a decentralized crypto-based financial services platform to people around the world with an assurance of security & simple process available to any common man on a tip of a finger.

4. CoinDCX –Story of Inception

Sumit Gupta & Neeraj Khandelwal were two friends who met each other in the year 2007 in Kota, Rajasthan when both of them were preparing for their IIT entrance exams, and eventually became friends on their journey when they made to IIT Bombay. During this time, they also came to know about their shared interests in entrepreneurship.After completion of their studies, Sumit Gupta joined an MNC in Tokyo which helped him ton 20 “understand the technicalities within a business corporation’ whereas Neeraj happened to join his family business which helped him to understand the ‘nuances of being an entrepreneur”.

Around 2014, Bitcoin, one of the earliest cryptocurrencies was gaining traction and garnering huge attention from the masses. Sumit Gupta realized that there were huge growth prospects behind distributed ledger technology and the blockchain traders needed to keep up with thousands of crypto trades in a matter of seconds, yet, there was no platform to trade them. Thus, he got the idea to build a decentralized marketplace for the storage & trading of cryptocurrencies. He approached Neeraj with the idea to build a business by tapping into the unexplored field of cryptocurrency by bridging the gap between the crypto technology & the consumers globally. Finally in 2018, after carefully studying the market & industry, CoinDCX was launched.

In an interview given to Yourstory, Sumit explained “In case of a trading platform like ours, the key competitive advantage that we aimed to develop was an advanced trading terminal that could outperform any other similar business in the market. However, it was challenging for us to connect fragmented cryptocurrency capital markets within a single trading terminal apart from the liquidity issues”.

Thus, the start-up claims to have developed a trading platform that could allow single-point access for all cryptocurrency instruments available in 500+ markets and handle up to one million transactions per second due to its highly scalable trade machine engine. Thus, CoinDCX is known to hold a daily trading volume of more than $10M and a monthly trading volume of $400M, for which it charges a transaction fee on every transaction or trade made on the platform.

5. CoinDCX- Founders & Team

Sumit Gupta

Sumit Gupta is the Co-founder & CEO of the crypto start-up CoinDCX. He completed his Bachelor’s & Masters’s in Technology from IIT Bombay with a specialization in Electronics and Signal Processing. After completion of his studies, he served as a Data Research Analyst at Columbia Business School and as a Software Engineer at Sony for a brief period. However, he left the job within a year and co-founded a start-up named ListUp before finally founding CoinDCX in 2018.

Neeraj Khandelwal

Neeraj Khandelwal is another Co-founder & CTO of CoinDCX. Like Sumit, he also pursued his graduation in Electrical Engineering from IIT Bombay. After completing his education, he worked in his family-owned business before co-founding CoinDCX.

Being the Chief Technical Officer, Neeraj manages & leads the technical development of the CoinDCX products. Under his leadership, the CoinDCX team comprising 100+ members including Full-stack developers, blockchain developers, machine learning engineers, app developers, software engineers, and data scientists, built the entire platform from the ground.

6. CoinDCX – Business and Revenue Model

The CoinDCX start-up business platform acts as a single-point access platform that allows its users to sell or buy common cryptocurrency instruments available in over 500 global markets. The CoinDCX platform is claimed to have developed a highly scalable trade machine engine that is capable to process up to one million transactions per second. With its patented liquidity aggregation model, CoinDCX allows users to access quick liquidity from the leading cryptocurrency exchanges around the world.Any user accessing the platform needs to convert his money into cryptos or vice versa on DCXInsta, gain by lending his/her holdings with DCXlend, and leverage trades with DCXmargin on 500+ markets available online on DCXtrade.

Speaking of revenues, like any other crypto trading platform, CoinDCX charges certain fees for different transactions on the platform such as a transaction fee, Deposit fees (for exchange of currencies), withdrawal fees, trading commissions (0.01 percent of the overall transaction in case of any exchange), and listing fees.

7. CoinDCX- Revenue & Expenses Breakdown

Interestingly, things changed for CoinDCX after the apex court of the country lifted the ban on cryptocurrency trading in India in the year 2020. Since, after this landmark ruling people started taking interest in the global crypto industry, CoinDCX started witnessing business growth in August 2020, attaining a 38% MoM (month-on-month) growth in the business since its inception in 2018.

Similarly, Neblio Technologies or CoinDCX achieveda remarkable feat in FY21 as it witnesses a 9X YOY growth in its operating profits reaching 4.4 Crores in FY21 as compared to 45.6 Lakhs in FY20. Similarly, there was a 527% upsurge in the YOY revenue for CoinDCX which is massive in itself from Rs 6.2 crore in FY20 to Rs 38.9 crore in FY21.However, since CoinDCX is in the early stages of development it also noticed an upsurge in its business expenses which grew by 7X reaching Rs. 40.7 Crores in FY21 as compared to only Rs. 5.7 crores.

8. CoinDCX – Funding, Investments & Investors

To date, Coin DCX has raised around $244 million in a total of 8 funding rounds from a total of 31 investors. The latest tranche of investmentcame on April 19, 2022, when CoinDCX collected a sum of $135M in a Series D funding round from a total of 13 investors with lead investors like Pantera Capital and Steadview Capital. This funding was also special in terms of valuation for CoinDCX as it pushed its market valuation to around $2.15 billion turning it into the ‘First crypto-tech start-up to enter the unicorn club”.

Highlights of all funding rounds for CoinDCX funding to date –

Investments

To date, CoinDCX has invested in the seed funding rounds of four start-ups, which have been highlighted below-

CoinDCX- Shareholding Pattern &Investors (2022)

CoinDCX has been backed by some of the leading venture capital firms in the world includes- Steadview Capital, Pantera Capital, B Capital Group, Polychain Capital, and Bain Capital Ventures, among others which helped it to secure the position of the first crypto unicorn of India.Yet, there is not much information available about the percentage of a stake held by different investors in the CoinDCX business, which has been highlighted below-

Accordingly, Polychain ventures are the VC that holds the largest business stake in CoinDCX, whereas in terms of individual shareholding, the co-founders Neeraj Khandelwal and Sumit Gupta, are the majority shareholders holding 14.36 % each.

9. CoinDCX – Marketing Strategies

Considering the lack of information & awareness regarding the crypto industry in India, CoinDCX has invested hugely in employing market tactics to attract its customers. Some of which have been described below-

i. Signing Amitabh Bachchan as the brand ambassador of CoinDCX

Considering the popularity & mass appeal enjoyed by the ‘Sehenshaah of Bollywood’, CoinDCX signed him as its first brand ambassador who could spread wisdom & knowledge about crypto technology on October 4, 2021.With this arrangement, CoinDCX intends to boost the overall knowledge of crypto technology to the general masses & promote the currency as an emerging asset class.

According to CoinDCX, the actor’s personality is a close match with the values of the brand. Amitabh has always been forward in his league whether it be the movies or any other arena of life, he has always been the ‘epitome of wisdom’, that will help the business to gain more credibility.

Apart from this he has been an active crypto investor himself and has even launched his own NFT (Non-fungible token), thereby collecting a considerable amount of the crypto universe. Sumit Gupta clarified “His knowledge of the field will prove to be valuable for the business to prove its credibility & will bring more visibility for the business in the crypto world while developing a strong brand recall value for us”. Though CoinDCX had shot advertisement campaigns with the actor, they reportedly have been held back due to a lack of clarity on regulation & policy framework and are planning to work on new ad campaigns with the legendary actor. Conversely, Amitabh Bachchan has disclosed in a blog post about the reconsideration of the advertisement campaign signed with the crypto trading major.

ii. New Advertising Campaign with Ayushmann Khurana

On October 18, 2021, the crypto unicorn start-up signed Ayushman Khurana as its new brand ambassador for its Ad campaign called “CoinDCX-Crypto ka Future Yahi Hai” while addressing concerns regarding the safety & security related to COINDCX investments.

iii. #BitcoinLiyaKya Campaign

Next, Coin DCX launched a new digital campaign called #BitcoinLiyaKya while taking a humorous take on the inclusion of cryptocurrencies like bitcoins in safe investments like the money lying in bank accounts due to the quick liquidity facility available on CoinDCX. The campaign has been targeted to drive more customers towards crypto investments through CoinDCX.

iv. New ‘Happy Day Rewards’ Campaign

On 19^th September 2021, CoinDCX launched a new campaign “CoinDCX “HAPPY DAY REWARDS” to attract new consumers by offering attractive rewards.This campaign was aimed to raise crypto awareness throughout the country and those users who chose to invest in cryptos through CoinDCX would earn up to Rs 1 lakh worth of Bitcoin (BTC) every day.

v. Strategic Business Partnerships

Apart from these multiple partnerships, CoinDCX has entered some key partnerships that could help it to improve its offerings and acquire more customers-

• Tie–Up with BITS Pilani-This crypto start-up entered a partnership with BITS Pilani, one of the renowned technology educational institutes to foster research, development, and innovation in crypto among the students in India in March 8, 2022.
• Solidus Labs- With an aim to curb money laundering through cryptocurrency in India, CoinDCX entered a strategic partnership with Solidus Labs on February 19, 2022, that could help it to enhance anti-money laundering protection.
• Partnership with Onfido –Onfido is a London-based business that is hailed as the leader in AI-based technology for identity-based verification. Thus, in pursuance of this partnership, Onfido will help the CoinDCX platform to better identify the identities of the users and the authenticity of their documents.
• Partnership with BitGo–To allow more security to the funds of the Indian users on the platform, CoinDCX entered a partnership with BitGo in May 2020.

10. CoinDCX – Growth & Challenges

Since its inception in 2018, CoinDCX has been hugely successful in attracting customers through its simple & user-friendly investing options & trading for cryptocurrency-based products for its users. This ISO-certified crypto platform offers an array of products such as CoinDCX, CoinDCX Pro, DCX Learn, and Cosmex, among others.

According to Sumit Gupta, Co-founder & CEO of CoinDCX “There are various reasons for thegrowing interest of investors towards crypto investments in India. Multiple crypto markets are being established and some companies are even gaining direct exposure in the segment. Further, the availability of more information & the focus on crypto technology has allowed the investors to make informed decisions for trading. Some key growth highlights of CoinDCX have been highlighted below-

• After successfully raising a sum of $90M in a Series C funding round in August 2021, CoinDCX became the first crypto unicorn start-up in India with a market valuation of $1.1 billion with noteworthy investors like former Facebook co-founder Eduardo Saverin’s B Capital Group, Coinbase Ventures, Polychain Capital, Block. One among others. Within six months, the valuation has reached $2.2 B.
• As cryptocurrency investing gained momentum in FY21, the user base expanded dramatically from 7.5M to 10M with a trading volume of $100M+.
• It has witnessed a 4X growth Q-o-Q in daily active users CoinDCX witnessed a 45.78% growth in its installed users between October and November 2021 alone.
• OneLedger has reportedly listed 500+ coins and 1000+ trading pairs on the CoinDCX platform.
• CoinDCX platform has derived 90% of its users from Tier-I & Tier II cities like Delhi and Lucknow, which is followed by Pune, Patna, Jaipur, Indore, and Agra, which are among the 15 top places with the most active user base.

Growth During the Pandemic

Interestingly, CoinDCX grewsignificantly even during the pandemic which according to Sumit Gupta has been “the most exciting year for the business”. During FY20 & FY21, while most of the businesses were struggling to acquire new customers due to the pandemic, CoinDCX scaled up exponentially and even expanded its team from 30 to 90 people on December 20.

According to some analysts, as more & more investors were looking for investments in cryptocurrency as these emerging liquidity alternatives, interest in digital assets grew steadily. Further, as more institutional and individual investors adopt these emerging asset classes to diversify their portfolios, this investment trend is expected to grow exponentially.

Block. One‘s CEO Brendan Blumersaid in an interview” With new global events this year, the trend is accelerating exponentially, as more institutional and individual investors are gearing up to embrace these new asset classes to diversify their portfolios.”

Launch of new CoinDCX Ventures

On May 10, 2022, CoinDCX announced the launch of its new venture CoinDCX Ventures, which is the investment segment of the CoinDCX business that will help this crypto unicorn to invest in other innovative crypto and blockchain Startups, for which it has already appointed Rohit Jain, who is a Harvard Alumni, as the Senior Vice President and the Head of Investments who will lead CoinDCX ventures in future. According to Sumit Gupta, CoinDCX ventures have been nothing short of a “milestone” and CoinDCX aims to invest Rs 100 Cr in CoinDCX Ventures in the coming 12 months.

CoinDCX “Earn” Crypto Yield Initiative

On May 26, 2022, CoinDCX announced its other venture “Earn” crypto yield initiative, which will allow the crypto asset holders on the platform to earn interests on their crypto investments through CoinDCX. The platform aims to deploy the assets under ‘Earn’ midsta wide range of profit-generating options like lending, margin trading, and staking, to offer attractive returns on investments. Again, this new opportunity to yield income will be coming without any lock-in period & flexibility of any time returns which will offer the customers greater flexibility & control over their investments.

Major Challenges Faced          

The journey of the unicorn crypto start-up has not been smooth as always. Some of the major challenges and how CoinDCX happened to resolve them along the way-

i. Cryptocurrency Ban by RBI & Regulatory Skepticism

Interestingly, the Reserve Bank of India announced its decision to ban cryptocurrency in India in the year of the launch of CoinDCX itself in 2018, which was demotivating. This resulted in the shutdown of various cryptocurrency start-ups. But, CoinDCX was one of the few crypto players who focused on its business throughout & contested this ban, which was finally lifted through the landmark judgment of the Supreme Court of India. This helped the business to grow its business as well as its user base which has drastically upsurged from 150K to 400K investors on its exchange.

In an interview given to Shraddha Sharma, Founder & CEO of YourStory, Sumit Gupta explained “We have witnessed several ups & downs throughout our journey. But, what helped us was the uninterrupted focus on what we had to do and building an innovative platform for our users”. Furthermore, we realized that the crypto space is full of uncertainties, which means that one year in crypto is three years in any other sector. Therefore, for now, our key focus is to enhance our products by making them more simple, safe & compliant.

Currently, CoinDCX is working on its aim to expand its business products & services for its users. Neeraj Khandelwal, in an interview, clarified “We started our journey with a simple idea which was to allow people to trade in cryptocurrencies. However, with time we have started working on diversifying our business offerings such as margin trading, derivatives, lending, and borrowing – financial products, which could add more value to the users.

ii. Questioning by Enforcement Directorate

According to multiple reports, the Enforcement Directorate (ED) is working on an investigation on the matter to verify whether not the Indian cryptocurrency companies are engaged in foreign currency offenses or money laundering activities. For which crypto start-ups like CoinDCX & CoinSwitch Kuber were notified for questioning by ED authorities. It has also been reported that the ED has already questioned Sumit Gupta (CEO & Co-founder) at its Bengaluru office and his statements were videotaped.

11. CoinDCX –Key Competitors

• WazirX
• CoinSwitch Kuber
• Zebpay
• Unocoin
• Binance
• Coinbase
• Poloniex
• LocalBitcoins
• HitBTC
• Kucoin
• C-Cex
• Bitso

12. CoinDCX – Future Plans

CoinDCX aims to increase its user base by boarding up to 50M+ users this year, for which it is specifically targeting new crypto enthusiasts, especially millennials and Generation Z.It also intends to strengthen its customer retention campaigns while also improving its existing array of products. Therefore, CoinDCX is working towards spreading more awareness & information about cryptocurrencies and the platform across the nation.

CoinDCX believes that though the crypto business has huge scope in India yet the road is challenging as a large number of potential investors lie unaware and uneducated with crypto technology. While presenting the development perspective of the CoinDCX platform, Neeraj Khandelwal explained “Youngsters & Adults aged between 22-45 are the most common users on the platform.  Thus, the app has been launched with an aim to remove any misinformation & fears related to crypto technology,make the market numbers more comprehensible, and spread information to help people to make informed decisions in the crypto universe.

He further stated “We aim to encourage people to make a smart investor and invest at least one percent of their disposable income to crypto assets in their portfolio by making informed decisions. Thus, the app makes the process of induction easier than using any popular applications like Amazon, WhatsApp, or booking an Uber cab.