Naspers
and Rand Merhcant Bank fintech investment arm AlphaCode have cashed in their
hodlings in South African-founded Luno, the country’s largest
cryptocurrency exchange. The business has been acquired by Digital Currency Group (DCG),
a global enterprise that builds, buys, and invests in blockchain companies.
Luno is a leading global cryptocurrency company which makes
it convenient to buy, sell and store and learn about cryptocurrencies.
While the purchase price has
not been disclosed, AlphaCode head Dominique Collett revealed that the
exit – AlphaCode’s first – was well above the company’s targeted
internal rate of return (IRR) of 25 to 35% for fintech investments.
“We have enjoyed working with the Luno team and
still believe in the potential of cryptocurrencies and Luno’s solid growth
potential,” she said. “We supported management selling the business
to DCG as it is very well positioned to leverage the platform.”
Luno
was launched in South Africa in 2013, and now has five million customers in 40
countries, and employs almost 400 staff members based in London, Singapore and
South Africa.
New
York-based DCG says it will be making a significant financial commitment to
help Luno expand globally, both in geographies where Luno currently operates
and beyond. It has already backed more than 160 blockchain companies
around the world.
In
addition to its venture portfolio, DCG is the parent company of several wholly
owned subsidiaries, including Grayscale
Investments
(the world’s largest digital currency asset manager), Genesis (a leading digital asset prime brokerage), CoinDesk (the preeminent media and events company in the industry), and
the recently-launched Foundry, which provides
institutional expertise, capital, and market intelligence to bitcoin miners and
manufacturers. DCG first invested in Luno in its seed round in 2013.
“We
are proud to have supported Luno as an early investor, and we recognize a
shared commitment to building mission-driven companies that can help transform
traditional financial services and improve economic freedom for people all over
the world,” says DCG founder and CEO Barry Silbert. “Luno is a high growth,
global business and there is a massive opportunity to expand organically and
through acquisitions.”
DCG
says it allows its subsidiaries to operate as independent companies, providing
leadership, partnership, and investment capital to help scale the businesses.
The Luno leadership team will remain intact and CEO and co-founder Marcus
Swanepoel will lead acquisition efforts.
“The
past seven years has been an incredibly exciting journey for Luno – helping
millions of our customers get access to crypto for the first time,” said
Swanepoel. “DCG has been an integral part of the Luno story during this
time, and we’ve been fully aligned on our vision and culture since day one.
Having the full backing of DCG just as we’re experiencing such a pivotal moment
of growth in the industry is not just an exciting and important milestone for
Luno, but more importantly it will significantly accelerate our ability to
reach our goal to help upgrade one billion people to a better financial system
by 2030.”
Luno
maintains key regional offices in Johannesburg, Cape Town, Kuala Lumpur, Lagos,
and Jakarta and will continue to focus on the existing geographies where it
operates across Europe, Africa, Australia and Asia. It said it
had an aggressive road map for future growth and aims to compete with
financial services firms globally. As a result, it is hiring for several key
positions.
