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Bitcoin VC Investor Tim Draper Re-Enters Indian Market Post-Demonetization

Last Updated March 4, 2021 4:54 PM
Samburaj Das
Last Updated March 4, 2021 4:54 PM

Prominent venture capitalist and prolific tech and bitcoin industry investor Tim Draper is making a return to the Indian market for early stage investing in startups in one of the world’s fastest growing economies.

The investment into India’s blossoming technology sector, despite common consensus of it being overvalued to the point of being a ‘tech bubble’ , will occur through Mumbai-based Blume Ventures, an early-stage venture firm that now joins Draper’s DVN (Draper Venture Network) as a member, according to TechCrunch .

Having existed since the early Silicon Valley boom era during the 90s, the DVN has backed over 600 startups over two decades, cashing out on a third of its portfolio that sees companies of the likes of Skype, Baidu and Twitch.

The Draper Venture Network, formerly known as DFJ Innovation, has invested in bitcoin startups around the world and previously had a presence in India after setting up shop in 2007. However, the local branch was shut down come 2013, repaying funds back to investors. In 2016 assets of the DJF India fund were sold off, leading to a complete exit from the Indian market.

So why come back? As reported by TechCrunch, the controversial and sweeping demonetization run enforced by the Indian government in a country rich with engineering and entrepreneurial talent, helped.

Draper told the publication:

When Prime Minister Modi decided to clean up the Rupee, it sent a strong message to investors like me that the Indian history of corruption may be coming to an end.

The Indian hierarchy has long been plagued by systematic corruption, the primary reason cited  by India’s Prime Minister Modi for November’s sweeping cash rinse.

With Blume as a member of the DVN, the focus will shift toward post-seed Series B-stage funding in a number of sectors including finance, payments, insurance, accounting and banking infrastructure.

Underlining bitcoin’s potential in India, Draper added:

I expect Bitcoin, the Blockchain and smart contracts to play an increasingly important role along with marketplaces where people can use distributed information and services, and other advances that entrepreneurs dig up.

“We have had such great experiences with Indian entrepreneurs in Silicon Valley…” Draper stated, brushing aside any concerns of tech investment fatigue or inflation. ”With a clearer rule of law, India might just take off.”

Bitcoin enthusiasts will remember Draper for his successful bidding of nearly 30,000 bitcoins at $600 each at the time from the US Marshals’ Silk Road auction from 2014. At the time of publishing, bitcoin is trading above $1020.

Toward the end of 2016, Unocoin, a prominent bitcoin exchange in India raised $1.5 million in a round of funding from foreign and domestic investors, a record sum for a bitcoin company in the country.

Image from Shutterstock.