Crypto exchange platform Luno, has announced a new investment arm that will be focused on investing in fintechs, crypto, DeFi and Web3 startups around the world. Called Luno Expeditions, the investment arm will be focused on investing in the early-stage round – pre-seed and seed financing round.
Luno does not only want to provide funding for these startups, it also wants to use its expertise to support founders too. With the new investment arm, Luno plans to support between 200 and 300 startups on an annual basis; these startups will also include startups in the fintech space.
The project will be led by Luno’s CEO Jocelyn Cheng and interestingly, it is an all-female team of five. However, Barry Silbert, founder and CEO of Digital Currency Group (DCG) and Marcus Swanepoel, co-founder and CEO of Luno, will be part of Luno Expeditions’ Investment Committee.
Luno’s parent, Digital Currency Group (DCG) will continue to invest in digital assets and later-stage companies just as it has always done, even with the introduction of Luno Expeditions. “Luno Expeditions will focus on the group’s early-stage investing in equity and convertible rounds,” Luno’s CEO Jocelyn Cheng said.
Luno Expeditions, as earlier stated, will not only be focusing on crypto but will include fintech startups. Unlike other funds, Luno Expeditions is choosing to focus on crypto and fintech. “There are very few truly global and very early-stage fintech funds in the world; we see an exciting opportunity here to build one. The reason why it’s not just pure crypto is that over the past few years, as operators scaling some of the largest crypto businesses in the world, we have noticed that there is such a strong intersection between some of the traditional fintechs and crypto,” Luno’s CEO explained.
She went on to explain how important fintech startups are for the crypto space, how they’ve acted as enablers providing payment gateways, and what have you. What she is saying is that crypto is still reliant on fintech, at least for now…
“There is still a lot of work to be done in building the infrastructure that crypto will rely on. So our aim is to be supportive of this broader ecosystem. So what this practically means is we will invest in fintech companies that we feel match that long-term thesis, not just any fintech company,” she said.
Luno Expeditions has chosen not to assign an exact figure of capital for its portfolio because it provides flexibility on matching deployment to what it sees in the market but the fund will invest between $50,000 to $250,000. It is therefore expected that Luno will invest between $15 million and $75 million in startups on a yearly basis. “We are likely to invest at the upper end of that range. Also, we have some flexibility, including writing larger cheques as we scale,” the CEO said adding that “The reason we didn’t go with a fund structure is that we don’t need any external funding to be able to build this business, both from a capital and management fee perspective. It also allows us to finance investments with evergreen capital, which we believe is more valuable to founders building companies in the fintech space and aligns all of our long term interests better.”