So what was feared is now happening. Indian government may be beating the drums of its ‘Make in India’ campaign after the recent inauguration of Samsung factory in Noida, but its policies towards the booming sector of cryptocurrencies and blockchain have led to Indian talent and funds now going to Make in America and other countries. Our country lagged behind during industrial revolution because of British Raj, during internet revolution because of economic backwardness left after British Raj and now it’s going to be left behind in blockchain revolution because of our very own government!
That’s right – what could have happened in India is now happening in US. A group of influential investors from our country have set up a new fund in United States to invest in crypto startups. The fund, known as B1T Capital, will focus solely on US based cryptocurrency startups and its Managing Partner has cited lack of regulations in India as one of the key reasons behind the decision of these guys to setup the fund in US. This is not a classic case of brain drain but a case of brain plus money drain!
According to SEC records the fund was registered on 26th of June in Salt Lake City of Utah. Speaking to Inc42 for an interview Utsav Somani, a partner of fund, said that the fund has raised a few (single digit) million dollars from 20 undisclosed investors, and all its partners are Indians “except maybe a few”.
“Almost all the investors and the capital in this pool (B1T Capital) are Indian, except maybe a few. It is registered in the US due to favourable regulations.”
Adding further he said that there’re going to be 500 new crypto funds in 2018, but none of them are from India. B1T Capital wants to change that. The fund, though set up only recently, has already made its first investment in Orchid.com and is also set to close another investment within this month itself. The ticket size of fund ranges from $75,000 to $150,000 and it invests only in companies that are having an impressive lineup of investors (to circumvent the need of thorough due diligence). For example, Orchid.com is already backed by Andreesen Horowitz and Polychain.
Somani also said that the infamous ICO market is out of his fund’s strategy because of its reputation for non-KYC based, unregulated and shady investments.
With Supreme Court also refusing to lift the banking ban imposed on cryptocurrency companies now it shouldn’t be surprising if more companies and investors from this industry also migrate to other countries with favorable regulations. Let’s see who’s next!