Luno Expeditions: accelerating the development of the global fintech & crypto ecosystem
Over the last (now almost) decade in crypto, we’ve been fortunate to do some incredibly exciting things through Luno – all to help us on our mission to put the power of crypto in everyone’s hands. Today, we’re taking this to a whole new level, and publicly launching something I truly believe is going to have an enormous impact on this mission, and the industry at large: Luno Expeditions.
In short, Luno Expeditions is our new early-stage investment business that supports fintech/crypto founders from all over the world on their journeys to build the next generation of financial services.
As we built and scaled Luno to nearly 800 employees and across more than 40 countries in both the developed and developing world, we realised a few things: Firstly, building fintech companies are incredibly hard. As one of our best investors used to say, “fintech is an adult’s game”, meaning unlike many other companies that can “move fast and break things”, the bar is so much higher in fintech due to the fact that you’re typically working with customers’ money and need to build and earn their trust, often navigate very complex regulatory regimes, and deal with many risks that are just non-existent for most other industries. As a fintech founder you often “don’t know what you don’t know” until it happens!
Second, we found that there are very few people or companies that have genuinely done this successfully at a global scale, which means it’s incredibly difficult to tap into useful networks of people that know fintech really well and that one can learn from, hire world-class and experienced talent, and also generally just learn from public resources eg blogs and books, which are few and far between in this sector.
Third, building trust often requires extreme localisation – that includes everything from the actual product and customer support to local regulatory requirements and integrations with local suppliers (if they even exist), as well as relationships with key stakeholders such as banks and regulators ‘on the ground’. Again, there is not a lot of places to reach out to learn how to do this better, especially in some of the ‘harder’ markets that often don’t have highly developed fintech ecosystems.
Lastly, fintech businesses often take much longer to build than other tech companies given many of these constraints. So having partners and investors that truly understand fintech/crypto and can really take a long term view is incredibly important.
Luno Expeditions is our way to help address many of these problems for founders of the next generation of fintech and crypto companies. We’ll be investing in early-stage rounds (seed, pre-seed; often a founder’s first cheque) across the world, into crypto/web3 companies but also fintech companies that we believe are ultimately also helping move the crypto industry forward.
What many people don’t realise is that the crypto industry is still incredibly reliant on the more traditional financial services and fintech space – we leverage them for payment rails and processing, compliance and security solutions, fraud detection and much more. There are also some fintech companies that are set to usher in the next wave of crypto adoption through transactions: this includes newly founded and nimble remittance and e-commerce companies. All this to say that in order for crypto to be successful, many of these other companies will also have to flourish, and so it makes sense for us to support them to help build the wider ecosystem so that everyone can benefit.
Supporting founders with money is the easy part. All the challenges mentioned earlier around knowledge, networks and localisation are harder, and things that we believe can be addressed at scale; and it’s something we’re going to be investing a lot into over the next few years to help set these founders up for success. Not just the ones we are fortunate to invest into, but also the broader entrepreneurial ecosystem with open-source and highly localised resources and content: more to be announced on this front soon.
We’re also not starting from scratch: we’re leveraging our parent company, Digital Currency Group’s 7 year + track record of early-stage crypto investing into over 200 companies, taking this over on behalf of the group under Luno Expeditions. We’ll be investing from DCG’s balance sheet, meaning we have evergreen capital and can genuinely take a long term view in terms of supporting founders. No pressure from external investors to return capital due to traditional fund structures and requirements – and one of the reasons why we raised money from DCG at Luno in the first place.
The Luno Expeditions team have quietly been working in stealth over the past few months to set this all up: you can find out more about them all on our website here. We’ve been fortunate to already have made over 20 investments (more on them here), and we’re planning to scale this up to 200-300 investments per year – making Luno Expeditions one of the most prolific investors in and supporters of the broader fintech ecosystem globally.
Needless to say, for us this overall opportunity is bigger than just investing, or seeking financial returns. The opportunity is to accelerate the entire financial ecosystem to the benefit of all. We are all in this together, and we’re going to make sure that we help rise the tide for everyone.