The subsidiary of Digital Currency Group, Luno, launches an investment arm titled Luno Expeditions focused on fintech and crypto/web3 startups worldwide.
As Luno strives to expand its investment activities to reach additional early-stage businesses at pre-seed and seed, this fund will draw on DCG’s seven-year experience financing web3, DeFi, and crypto startups.
According to a TechCrunch report, Luno Expeditions plans to invest between 200 and 300 startups every year, expanding beyond cryptocurrency into the broader fintech sector.
Expanding this investment arm will demand a ‘localized’ approach, and Luno Expeditions believes it can use its market expertise to help founders across the five continents in which it functions.
CEO Jocelyn Cheng will lead an all-female team of five to lead this new endeavor. As managing director of Global Innovation Fund, an impact investing VC, Cheng has invested in global startup founders for the past six years.
The Investment Committee of Luno Expeditions includes Barry Silbert, founder, and CEO of DCG, and Marcus Swanepoel, co-founder, and CEO of Luno.
Jocelyn Cheng stated, “There are very few truly global and very early-stage fintech funds in the world; we see an exciting opportunity here to build one.”
Fintech companies, according to Cheng, are crypto enablers. Cheng said that while the long-term hypothesis is crypto to revolutionize the global financial system, many founders and companies are working directly and indirectly toward that same goal.
Cheng added, “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.”
Luno Expeditions chooses not to commit a specific amount of capital to its portfolio firms because it allows it to match deployment to market conditions.
The CEO stated, “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.”
However, the fund will make investments ranging from $50,000 to $250,000. Luno Expeditions should spend between $15 million and $75 million each year, multiplied by the number of businesses it expects to fund each year.
The number of firms creating investment initiatives to support crypto and fintech companies are increasing. Recently, Singapore-based DeFi services platform, Cake DeFi, announced the launch of a $100M venture arm. The Venture fund will invest in Web 3 and metaverse startups, NFTs, gaming esports, and fintech spaces.
