Luno Spins Out Investment Arm to Pump $15M to $75M a Year Into Crypto Companies

Cryptocurrency exchange Luno has launched an investment arm through which it plans to invest between $15 million to $75 million a year into crypto and fintech companies.

Luno's parent company, Digital Currency Group, is also the parent of CoinDesk.

Luno Expeditions will focus on early-stage investing (seed and pre-seed) with the aim of making 200-300 such investments per year.

The division will spearhead all the early-stage investments of Digital Currency Group.

"Practically speaking, we expect to invest a range of $15 million to $75 million per year," Luno Expeditions CEO Jocelyn Cheng told CoinDesk.

Luno plans to invest $50,000 to $250,000 per company with flexibility for this figure to grow, she added.

Luno, which is based in London and is one of Africa's largest crypto exchanges, is funding this venture from its own balance sheet rather than via a fund structure, which Cheng explained provides greater flexibility.

"The reason we didn’t go with a fund structure is because we don’t need any external funding to be able to build this business, both from a capital and management fee perspective," said Cheng. "It also allows us to finance investments with evergreen capital, which we believe is more valuable to founders building companies in the fintech space."

Luno Expeditions has so far made investments in 20 companies, including a crypto compliance tool in Israel and a non-fungible token (NFT) marketplace in the U.S.

Many of the world's major crypto exchanges boast an investment arm as part of their structure in order to generate growth in the broader digital assets ecosystem.

Coinbase Global's (COIN) Coinbase Ventures, for example, made 150 such deals in 2021, with data by Crunchbase putting its total investment for the year at $3.7 billion. And crypto derivatives giant FTX recently set up the $2 billion FTX Ventures Fund to invest in crypto start-ups.

Read more: Kraken Ventures Raises $65M for Early-Stage Crypto Fund