India’s Web3 Ecosystem Expands to 1,000 Startups with 35 Million Traders

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In India, the Web3 sector has grown significantly over the years, now boasting over 1,000 startups that provide diverse services locally, as mentioned in a recent report from Hashed Emergent, an investment firm specializing in Web2 and Web3 companies. The document underscores consistent advancements within India’s Web3 industry, positioning the country as a formidable player on the global stage.

The “India’s Web3 Landscape 2023” report from Hashed Emergent was collaboratively produced, with valuable insights and features contributed by our partners including Coinswitch, KPMG India, Kratos Gaming Network (KGen), and Devfolio.

India’s Web3 Developer Share Jumped 300%

In just over five years, the proportion of blockchain developers in that country grew significantly from a small 3% in 2018 to a noteworthy 12% in 2023. The United States currently holds the largest share of Web3 developers at 26%, but India’s rapid expansion is worth mentioning as its developer count surged by an impressive 300%. According to the report, Bengaluru has emerged as a promising hub for India’s burgeoning Web3 industry.

Hashed Emergent’s report contains more insights about India’s Web3 market. For instance, despite the increase in developer activity and blockchain market share, India’s Web3 funding fell 81% between 2022 and 2023, from $1.4 billion to about $250 million. Specific numbers also show a decrease, from 62 Web3 deals in 2022 to 47 in 2023.

According to the joint report, the finance sector held the leading position in India’s Web3 market financing, mainly through crypto exchanges, up until 2023. However, there has been a shift in focus towards infrastructure projects since then. KPMG India’s Head of Web3, Krishna Tyagi shared this insight.

“Blockchains have opened up new possibilities for creativity, including Decentralized Finance (DeFi), tokenizing Real-World Assets, Self-Sovereign Identities, and Track & Trace systems. We’re always pushing the boundaries and contributing to this evolving space to enable our clients to harness the potential of blockchain technology.”

Regrettably, there were fewer financing rounds, particularly for follow-on funding. The founders made this decision in response to a tough economic climate, opting to reduce expenses and hold off on further funding.

To date, India leads the way in on-chain adoption for emerging markets with over 35 million trading accounts on its top exchanges, surpassing more than 150 other countries in 2023. Among these users, an impressive 75% are under the age of 35. Indian traders tend to favor Bitcoin (BTC) and Ethereum (ETH) as their preferred cryptocurrencies for trading on centralized exchanges (CEXs).

Non-Finance Web3 Adoption

In addition to finance, there’s a significant amount of action taking place in Web3. For example, among survey respondents, approximately one-third (29%) reported spending over Rs 1,000 ($12) on Web3 games, which is more than double the 10% who indicated this for Web2 games.

Moreover, major corporations such as Infosys and Eros have expressed their intent to explore Web3 engagement. Notably, over half of India’s state administrations are actively planning or implementing projects based on blockchain technology.

Parth Chaturvedi, Investments Lead at CoinSwitch Ventures, shares two key takeaways from the report. Indian investors remain engaged in digital asset trading and investing even during the extended bear market. Furthermore, Indians persist in launching Web3 startups within the country, despite facing challenges such as limited funding and uncertain regulatory guidelines.

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2024-04-09 17:50