Hashed Emergent, the South Korea-based early-stage VC arm of Hashed, launched the second edition of India’s Web3 Landscape 2024 Report at India Blockchain Week (IBW) in Bengaluru, India recently.
IBW 2024 is a gathering of thought leaders, developers, and enthusiasts driving the next wave of blockchain adoption.
Hashed Emergent shares regulatory proposals for stakeholders and regulators of the Web3 and crypto ecosystem to address the industry’s most significant pain points in India. The VC fund urges regulators to adopt a progressive framework with a pragmatic policy tone.
Funding on the Rise
According to the Hashed Emergent report, funding activity for Web3 startups grew 82% year-on-year to US$462 million in the first nine months of 2024, a significant increase from US$254 million in 2023.
The surge was led by global Web3 funds, accelerators, and ecosystem efforts by leading blockchains. The study found that the majority of investments went to Web3 infrastructure businesses.
However, this is still lower than the US$1.4 billion raised by Indian Web3 startups in 2022. According to the report, there has been an increase in the number of deals and the average fundraising size, especially at the early stage. The surge is led by global Web3 funds, accelerators, and ecosystem efforts by leading blockchains.
India’s Web3 Superpower
Hashed Emergent suggests India should participate in and lead the global internet economy. This would enable innovation by building an ecosystem and consuming technologies that are popular worldwide.
It highlights that Web3 offers a massive opportunity for Indian funds to follow the global trend. On the one hand, while international asset managers reportedly allocate 1% to 6% of their portfolios to crypto, Indian VCs are allocating less than 10%. This means that even a small portion of capital can unlock over US$1 billion in investments in the next five years.
The report recommends that India emerge as a global developer hub with a 28% annual growth and 17 million developers driving innovation. The country ranks second in global open-source contributions and is on track to overtake the US as the most prominent developer market by 2028.
Its strategic value for Web3 is undeniable, as its share of global developers has doubled from 6% to 12% in just two years. The active ecosystem has grown significantly, and the country is now a central hub for leading projects. This growth underscores India’s unmatched importance in the Web3 space.
According to the Hashed Emergent Report, Indian startups are thriving against all odds as they have demonstrated resilience and adaptability. By overcoming regulatory hurdles to achieve growth and legitimacy, the region is setting new heights in the Web3 space.
1,000 Startups Driving Innovation
India’s Web3 dominance is fueled by 1,000 startups, global investment, and developer talent. The country is on track to lead Web3 adoption by 2027, driven by startups, developers, and government-backed blockchain initiatives. These Web3 startups are spread across the finance, infrastructure, and entertainment sectors.
A report on India’s Web3 landscape says a large startup network backed by global investment and local adoption has positioned The country to spearhead Web3 innovation.
Crypto and Gaming Dominate
According to the report, India leads the Web3 race regarding crypto adoption based on on-chain metrics, followed by the US, UK, China, and Nigeria. By 2024, India will be home to nearly 12% of all crypto developers worldwide, making it the second-largest developer base after the US. The study predicts that India will top the list by 2027.
While The country’s crypto tax regime initially discouraged individuals from investing in crypto, 2024 witnessed a resurgence in crypto investments across centralized exchanges, led by new growth hubs and emerging categories. Data sourced from crypto exchange CoinDCX shows that 45% of retail portfolios in India feature leading cryptocurrencies, making them the cornerstone of most investment strategies.
India is emerging as a hub for gaming development. Lysto, a gamer network, estimates that the Indian gaming industry will reach US$9.2 billion over the next five years, with Web3 gaming emerging as a major contributor driven by higher average revenue per user.
The Next Chapter of Innovation
Several central and state government initiatives are supporting the growth of Web3, with key use cases being land registration, digital certification, and supply chain. Additionally, contributions from leading layer-1 and layer-2 ecosystems and a young developer population are driving the next wave of innovation and growth. Some major protocols with a footprint in India include Avalanche, Aptos, Ethereum, Polygon, Starknet, Solana, and Ton, among others.
India’s Web3 Landscape 2024 highlights the nation’s rapid growth, with US$462M in funding and a thriving ecosystem of 1,000 startups. The country is poised to lead Web3 adoption by 2027 and excels in crypto, gaming, and developer contributions. Backed by government initiatives and protocols like Polygon and Ethereum, India is set to shape the future of global Web3 innovation.