Despite India’s strict stand on cryptocurrencies, native entrepreneurs and blockchain enthusiasts are stopping at nothing to play their part in the burgeoning sector.
[Editor’s note (10:45 AM): The headline has been updated to remove an erroneous previous estimate of the fund. ]
India’s Loss is USA’s Gain
While some cryptocurrency businesses are shifting base or launching litigations against the government, a small group of influential investors from the country have launched B1T Capital – a U.S.-based incubator focused exclusively on cryptocurrencies.
As per SEC records, the fund was registered on June 26, 2018, in Salt Lake City, Utah, and has raised “close to a million dollars” from undisclosed investors. The entity will exclusively invest in cryptocurrency startups registered in the U.S. via private presales.
B1T Capital partner Utsav Somani explains the move was a straightforward choice given the abysmal lack of regulations in India, with a highly-favorable regulatory and technological environment in the U.S. contributing to their decision. The entrepreneur confirmed all partners are Indian citizens, “except maybe a few.”
Somani spoke to local publication Inc42 about the development:
“There are going to be 500 new crypto funds in 2018 globally. Interestingly, none are from India. B1T Capital is a step towards changing that. India is the most emerging market geography that projects will need access to at some point in their maturity curve.”
He added the fund aims to open India’s “crypto ecosystem,” and hopes to find synergy in this regard.
Despite being a newly-formed fund, B1T Capital has invested in Orchid, a distributed marketplace that aims to create a framework for digital citizenship, and aims to close another investment in July 2018.
Ticket sizes range from $75K to $150K, with Somani revealing the fund invests in companies which already have an impressive lineup of investors. This circumvents the need for conducting thorough due diligence.
Their core philosophy is evident after viewing investors in Orchid.com, which includes Polychain, Metastable, and Andreessen Horowitz. The fund targets web 3.0 infrastructure layer projects which follow strict regulatory guidelines.
“No ICO Flipping”
Somani stated the ever-changing landscape of the cryptocurrency market makes it difficult to create a long-term strategy, which B1T Capital hopes to tackle by reassessing their portfolio “every few months.”
The infamous ICO market is out of B1T’s investment strategy for their unregulated, mostly non-KYC based, shady reputation.
Somani noted B1T Capital is not looking to “flip projects like retail investors,” but back projects that look promising, aim to redefine protocol layers for various problems, and lead innovation.
Meanwhile, India continues to grapple with the government lockdown on registered banks lending services to cryptocurrency businesses. While this can contribute to brain-drain as skilled talent leaves the country to pursue enterprising careers in the sector, Somani opinions the upcoming 2019 elections may lead politicians to leverage the industry – and votes – to their advantage.
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