Accel and Elevation Capital-backed Pillow halts services in India

Crypto startup Pillow has wound up its operations in two key markets: India and Nigeria. The company attributed the current regulatory climate among others as a reason for discontinuing its service in the two countries.

“We regret to inform you that Pillow is going to be discontinuing its service from June 22, 2023,” Pillow informed its users this week.

The Morning Context reported the development first.

The discontinuation of its services in India is quite surprising as the company raised $21 million in total capital including a $18 million Series A in October 2022. It counts Accel, Quona Capital, Elevation Capital, and Jump Capital Elevation and a host of crypto angels Scott Lewis, JD Kanani & Sandeep Nailwal, Prabhakar Reddy, and Aniket Jindal as its backers.

Founded in 2021 by Arindam Roy, Rajath KM, and Kartik Mishra, Pillow used to generate downside-protected interest on crypto assets by investing in curated, actively managed DeFi strategies created by the team. The company used to allow Indian users to trade across $USDC, $USDT, $BTC and $ETH among others.

This is the second Indian-origin crypto company to shut operations in the past few months. Last month, Bengaluru-based Flint Labs also discontinued its services citing regulatory hurdles, negative market sentiment, and other challenges. Over the past couple of years, the apex banking body in India has been tightening regulations around the crypto ecosystem. 

The Enforcement Directorate raided the premises of WazirX’s director and froze bank account/s to the tune of Rs 64.67 crores while the financial law enforcement agency also froze bank accounts of Singapore-based crypto app Vauld. Due to lack of adoption and regulatory heat, Indian cryptocurrency exchange WazirX shut down its NFT marketplace.