Blockchain-centric investment firm Digital Currency Group (DCG) has acquired Luno, a retail-focused cryptocurrency exchange with over five million customers in over 40 countries. Luno will continue to operate as an independent, wholly owned subsidiary of DCG, the companies said. Financial terms of the acquisition were not disclosed.
Expansion strategy
The deal marks another shift in DCG's strategy, including the full acquisition of a highly retail-centric business. “We have invested in many retail businesses around the world, including nearly two dozen exchanges,” said Mark Murphy, chief operating officer of DCG.
"But this is the first branch that is both a wallet and an exchange, which obviously have a large number of retail investors." DCG, which recently launched a new cryptocurrency mining division called Foundry, has so far focused on institutional cryptocurrency businesses like Genesis and Bitcoin system on the vibrant cryptocurrency loan market.
Murphy added that DCG is not looking to make further acquisitions at the parent company level. “But Luno intends to expand globally both organically and through acquisitions,” he said. "We see this agreement as a potential first step towards a 'roll up' strategy with Luno."
The last piece of the puzzle
Launched in 2013, Luno was initially based in Singapore before moving to London a couple of years later. The company has a team of nearly 400 employees and is a major exchange in the African continent and a major player in Southeast Asia.
The exchange, which has raised approximately $ 13,8 million in funding to date, first received investment from DCG in 2014, and its relationship with DCG founder and CEO Barry Silbert goes back even further. “We have known DCG for seven years,” said Marcus Swanepoel, co-founder and CEO of Luno.
“I remember when we were five people in a room on a phone call with Barry talking about the future of cryptocurrencies and where the industry will go. So for seven years we have been working together and addressing these discussions ”.
Swanepoel said Luno is already in a solid financial position and that "more people over the years have tried to acquire the company". DCG's position in the cryptocurrency industry was an interesting feature for Luno, he added, as was how a retail company can play a role within that position.
“After the Foundry announcement two weeks ago, I thought DCG was hitting every single type of financial item, every single type of market,” Swanepoel said. “But there were two pieces missing: having a strong presence in frontier or emerging markets and having a retail business. Now we have really filled the puzzle ”, he concluded.
