Indian Bitcoin exchange Unocoin raises $1.5 million in new funding led by Blume Ventures, with participation from digital currency companies

Indian bitcoin exchange startup Uncoin has raised $1.5 million in a new round of funding.

The pre-Series A round was led by Blume Ventures, with participation from ah! Ventures, Mumbai Angels, BootsVC, BnkToTheFuture, Digital Currency Group and FundersClub.

This is the second round of financing for Unocoin following its seed round. The Bangalore-based exchange was founded less than three years ago, but the number of customers exceeded 100,000 within a few months after the initial launch.

According to Unocoin co-founder Sunny Ray, the funds raised will be used for a variety of purposes, including providing liquidity to its markets and expanding the exchange’s operations in India and abroad. Some of the funds will likely be used to improve trading efficiency in India’s largest cities.

He told CoinDesk in an interview:

“One of the things we’re striving for is a stronger presence in these large cities, a physical presence that can be seen.”

Those backing the project include Karthik Reddy of Blume Ventures, who said they also see the funding as a tool for Unocoin to grow its presence in India.

Reddy said in a statement:

“We believe Unocoin will further change the market landscape and gain more traction in the remittance and e-commerce sectors in India.”

It remains to be seen what the long-term trajectory of Bitcoin will be in India, however, senior Indian regulators have not been positive about Bitcoin in the past.

In late 2013, the Reserve Bank of India warned local consumers about the risks of using digital currencies. At the time, the central bank said that Bitcoin (and altcoins such as BBQcoin) were not backed by any central authority and had not authorized any company in the space.

Last summer, two RBI officials said they believed digital currencies ‘have the potential to support criminal and anti-social gains,’ calling for joint regulation. However, the Indian central bank later called on the country’s financial sector to explore the application of the technology behind these digital currencies.

Today, Bitcoin is gaining momentum in India, and someone published an article a few days ago stating that India is likely to surpass China in the use of Bitcoin.