Tracing and Analyzing Zebpay’s journey

The foundation of Zebpay was laid down in 2012 in Ahmedabad, Gujarat. Mahin Gupta, a software engineer—who, as per a Forbes article, got the opportunity to work with an Australian cryptocurrency exchange in 2012—had started India’s first cryptocurrency exchange, then called In 2013, after the RBI released its first warning against cryptocurrencies, authorities paid a visit to Gupta and other Bitcoin exchanges that were functional then. Nothing serious happened.

In 2014, Saurabh Agrawal and Sandeep Goenka came on board and the exchange was renamed as Zebpay. Agrawal became the CEO of the company and Goenka took on the duties of the COO. The company’s revenue model was based on the spread between the buy and sell prices of Bitcoin and further charged a commission of 0.5% to 1% on certain transactions.

First mobile app

In 2016, Zebpay became the first to launch a mobile app for Bitcoin trading, shortly followed by Unocoin. Zebpay soon became the market leader after this and claimed to have 70% of the market share at one point in time.

This traction did reflect in its financial growth.

For the year ending March 2017, Zebpay clocked a revenue of Rs 14.59 crore (~$1.97 million), representing a 1,300% growth compared to the previous year. The bottom line also showed tremendous growth. From a loss of Rs 0.43 crore (~$58,011) in FY16, Zebpay’s profits jumped 1169% to Rs 4.6 crore (~$620,586) in FY17.

Apart from the income from its operations, the information provided by research firm Venture Intelligence also shows that Zebpay raised $1 million from Amit Jindal, MD of textile firm Jindal Worldwide, Arjun Handa, MD of pharmaceutical company Claris Life Sciences and Nagendra Chaudhary, chairman of civil engineering firm Triangle Engineering in January 2016.

In early 2018, Ajeet Khurana, a startup veteran and blockchain expert, took over as the CEO of the company.

Of mistakes and missed opportunities

While it is clear that Zebpay was at one point in time a clear leader with a seemingly bright future, it failed to capitalize on these advantages. The company made some crucial mistakes long before the hanging sword of regulatory Damocles loomed over its head.

These mistakes led to missed opportunities and an inability to acquire new users in the market. So much so that it even lost several existing users to competitors.

One such core mistake involved the absence of an open order book. While this allowed Zebpay to profit off the spread, the lack of transparency irked many users. Zebpay allowed the buying and selling of only Bitcoin and was quite late in introducing other crypto assets. These were two major reasons why many users shifted to Koinex when it launched last year in August. “People love transparency, they hated the spreads, they were also worried about not having different assets to invest. For a different asset you would have to do a KYC [Know Your Customer] on a different platform,” Naik says.

High commissions, delayed deposits, and withdrawals were some of the grievances customers had with Zebpay, says a crypto trader who goes by the name “Indian CryptoGirl”.

“We were the first ones in the country to introduce instant INR deposit and withdrawals and that really changed the game for us. We introduced it in October and simply adding this feature helped our volumes surge 100 times,” Naik adds.

By December 2017, Koinex is said to have well surpassed Zebpay in terms of trading volume as it was providing around five tokens to trade. “By December, we were doing 27 times the volume of Zebpay,” Naik claims.

Zebpay launched an open order book only in January this year, and at the same time, they added Bitcoin Cash, the second cryptocurrency to list on their platform.

Reacting to regulations

While the RBI statement of 5 April, banning the nation’s banks from dealing with cryptocurrency exchanges, was a hindrance to crypto startups, it wasn’t a kiss of death by any measure. RBI didn’t hint at any kind of government crackdown on digital currencies and basically left the legality of Bitcoin and other cryptocurrencies unchanged.

While the move to cut off banking channels that allowed users to deposit and withdraw from exchanges directly to their bank accounts would impact transaction volumes and the ease of doing business, it didn’t cut off access completely. There were other forms of exchange that we’re able to provide off on-ramp services for those wishing to enter or exit the market; most notably, peer-to-peer (P2P) transactions were not blocked.


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