Formerly known as BitX, crypto exchange company Luno has diversified its offerings through an investments wing called Luno Expeditions to fund Fintechs and crypto or Web3 startups globally. Luno allows users to buy, sell and store cryptocurrencies, with operations in about 43 countries across Africa, Asia, the United States, and Europe.
Luno is a venture capital firm Digital Currency Group subsidiary and currently serves over 9 million customers. The investment arm, Luno Expeditions, seeks to invest at the pre-seed and seed stages of crypto and fintech startup firms across the globe. Before the official launch, the company has already funded more than 20 fintech and crypto companies.
They include a women-focused bank in Pakistan, a crypto compliance startup in Israel, and an NFT marketplace in the US. In Africa, they have invested in a remittance firm in Tanzania. Anytime you look at digital and crypto market growth projections, Africa is at the top of the list. With the population expected to double by 2050, the continent is keeping up with emerging technologies to help propel its financial ecosystem forward to match developing economies.
The youthful population in Africa has been driving change towards adopting emerging technologies and leveraging digital platforms and solutions to enhance economic growth and innovation for better solutions to today & future problems. Africa is building digital infrastructures and adopting digital technologies faster than any other region globally. The Covid-19 pandemic has also sped up digital adoption as consumers and companies look for better alternatives to access and offer services.
Africa’s poor financial infrastructure has left many unable to access vital services for their social and economic growth. With most of the population unbanked and without access to ‘traditional’ financial institutions, Fintechs have emerged to fill the gap and help the African masses gain access to much-needed financial services.
Fintechs and crypto solutions are emerging to fill financial gaps that still hold back the potential for a more inclusive, sustainable, and far-reaching financial ecosystem. (Note: cryptocurrencies are unique fintech enabling the financial sector) The industry facing the largest shift in Africa is the banking industry, as people seek simpler and more accessible solutions. The Covid-19 crisis has also made more people in the continent switch to digital banking, as is evident with the introduction of mobile apps in many financial institutions. In the past three years, Fintech fundraising in Africa has overshadowed all other investments directed at other tech startups across the continent.
Fintechs received about $3 billion in investments in 2021, accounting for over two-thirds of all startups’ investments. As more people in Africa turn to technology-based solutions, the region has to build a strong digital ecosystem regarding regulations and infrastructure (for example internet) to allow more startups and technopreneurs to develop more economically viable solutions.
In addition to regulatory challenges, the lack of strategic partnerships and finances has limited the growth of crypto and fintech startups as agents of economic change across the continent. Access to finances will help these startups scale up their operations and develop solutions to advance the adoption of technology-based solutions in Africa’s financial ecosystem. The launch of Luno Expeditions provides an avenue for more African startups to access funds necessary for their operations and the growth of their impact in Africa’s under-banked and unbanked populations, which require more accessible solutions.