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.
The leader in news and information on cryptocurrency, digital assets and the future of money, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups. As part of their compensation, certain CoinDesk employees, including editorial employees, may receive exposure to DCG equity in the form of stock appreciation rights, which vest over a multi-year period. CoinDesk journalists are not allowed to purchase stock outright in DCG.
Learn more about Consensus 2023, CoinDesk’s longest-running and most influential event that brings together all sides of crypto, blockchain and Web3. Head to consensus.coindesk.com to register and buy your pass now.