Picture: 123RF/ dimarik16
Picture: 123RF/ dimarik16

Naspers-backed cryptocurrency exchange Luno has been acquired by Digital Currency Group (DCG), a US based blockchain investor, for an undisclosed sum.

Founded in SA by CEO Marcus Swanepoel and chief technology officer Timothy Stranex in 2013, Luno has grown to become the country's largest cryptocurrency exchange, competing with firms such as VALR and AltCoinTrader. Luno has five-million customers across 40 countries and almost 400 employees based in London, Singapore and SA.

According to start-up specialist Crunchbase, Luno has raised about $13.8m (R233m) in funding over four investment rounds.

DCG builds, buys and invests in blockchain companies all over the world, backing more than 160 companies in 35 countries and investing directly in digital currencies. The firm first invested in Luno, which allows users to buy and sell cryptocurrencies such as bitcoin and ethereum, in its seed round in 2013.

Two years later, the exchange attracted about $4m in funding led by technology investor Naspers. Local backing has also come from Rand Merchant Investment Holdings (RMI) through its fintech investment arm, AlphaCode. Other investors include Southeast Asia-focused venture firm, Venturra Capital and Europe's Balderton Capital.

As part of this latest transaction, Naspers and RMI have sold their stakes in Luno to DCG. RMI said it sold its stake in Luno for cash to DCG “achieving an attractive price”.

In a statement, Dominique Collett, RMI senior investments executive and head of AlphaCode, said: “We are delighted by this transaction as it is AlphaCode’s first exit and well above our targeted IRR of 25%-35% for our fintech investments. We have enjoyed working with the Luno team and still believe in the potential of cryptocurrencies and Luno’s solid growth potential.”

Funds will be used to expand Luno's presence internationally, with the company saying it will maintain key regional offices in Johannesburg, Cape Town, Kuala Lumpur, Lagos and Jakarta, and has “developed an aggressive road map for future growth and will ultimately compete with financial services firms all over the world. Luno is hiring for several key positions.” 

“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,” Swanepoel said.

He said this was an 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.”

gavazam@businesslive.co.za

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