Cryptocurrency exchange Luno has established an investment arm that intends to invest between $15 million and $75 million per year in crypto and fintech startups. Digital Currency Group, Luno’s parent company, is also the parent company of CoinDesk.
Luno Expeditions will concentrate on early-stage investing (seed and pre-seed), aiming to make 200-300 such investments each year. The division will oversee all of Digital Currency Group’s early-stage investments.
Luno Expeditions CEO Jocelyn Cheng claimed that Luno, a London-based crypto exchange and one of Africa’s biggest, is supporting this endeavour from its own balance sheet rather than via a fund structure, which Cheng claimed allows better flexibility.
“We didn’t go with a fund structure since we don’t require any external money to create this firm, both in terms of capital and management fees,” Cheng said. “It also enables us to fund investments with evergreen cash, which we feel is more helpful to entrepreneurs establishing fintech startups.”
Luno Expeditions has invested in 20 firms so far, including a crypto compliance tool in Israel and a non-fungible token (NFT) marketplace in the United States.
Many of the world’s leading cryptocurrency exchanges include an investing arm as part of their structure to drive development in the larger digital asset ecosystem.
Coinbase Global’s (COIN) Coinbase Ventures, for example, executed 150 such acquisitions in 2021, with Crunchbase statistics showing a total investment of $3.7 billion for the year. FTX, the crypto derivatives giant, just established the $2 billion FTX Ventures Fund to invest in crypto start-ups.
