Luno’s journey from a small startup to R121 billion in transactions

Cryptocurrency exchange Luno recently revealed its customer base has surpassed 7 million users, up 892% from 705,000 users in the beginning of 2017.

Notably, it recorded 300% year-on-year growth in transactions on its platform in January 2021, hitting a value of $8.3 billion (R121 billion).

Luno currently offers its range of consumer products in 40 countries, with an international team comprising more than 400 employees working from offices in Johannesburg, Cape Town, London, Singapore, Kuala Lumpur, Jakarta, and Lagos.

It is also ranked in the top six cryptocurrency exchanges by the CryptoCompare Exchange benchmark, with a top tier AA rating.

To understand the significance of these achievements, one should go back to eight years when the exchange was started.

The company was founded in 2013 by two South Africans – former investment banker Marcus Swanepoel, and Timothy Stranex, who had previously worked for Google as a software engineer.

Initially going by the name of Switchless, the team was focused on building blockchain systems for large financial institutions, including the first fully integrated Bitcoin system for Standard Bank.

However, realising that it would take banks very long to move into the space given the many misconceptions as to what blockchain technology could do.

They decided to focus on the value of blockchains as decentralised cryptocurrencies such as Bitcoin or Ethereum.

To offer cryptocurrency trading services for consumers, they launched the BitX exchange in South Africa.

In 2014, it was expanded into Indonesia, Malaysia, and Nigeria.

Luno co-founders Timothy Stranex and Marcus Swanepoel.

2015 saw BitX received a $3 million injection in a funding round led by Naspers, with additional funds from Digital Currency Group (DCG) and Ventura.

The following year, the company grew its team to 15 people and reached 100,000 downloads on the Google Play Store.

2017 marked a milestone for BitX, starting with its rebranding to Luno in January.

In September 2017, Luno closed another funding round for $9 million, before announcing its expansion into Europe and reaching 1 million downloads on the Google Play Store.

Notably, it added support for the Ethereum network – the world’s second most valuable cryptocurrency – by the end of that year.

In 2018, Luno integrated Segwit, doubled its app users, and launched new offices in London and Johannesburg.

It also won the award for fastest growing tech company in the UK in TNW’s Tech 5 competition.

In 2019, Luno 2.0 was launched with support for Bitcoin Cash among its new capabilities.

Swanepoel said the last 12 months hastened the global adoption of cryptocurrency.

“While a lot of the attention has been around institutional adoption, retail adoption has been growing at an arguably even more frantic pace.”

“In 2021, we expect to continue this exponential growth, on track to reaching our goal of one billion customers by 2030,” Swanepoel said.

Luno has developed an aggressive road map for future growth and ultimately aims to compete with financial services firms globally, with the goal of “upgrading the world to a better financial system.”

Its success led to one of its earliest investors – the world’s largest blockchain investment company Digital Currency Group (DCG) – acquiring it in September 2020.

CEO Barry Silbert described Luno’s growth as “phenomenal” and said it was one of the fastest-growing companies in DCG.

“We will continue to make significant investments to support Luno’s commitment to drive global economic and social change through the transformation of traditional financial services,” Silbert stated.

While Luno is now headquartered in London, its growth in South Africa continues.

The exchange processed nearly $3 billion (R44 billion) in the country last year, and already exceeded this volume in the first three months of 2021.

It has added almost a million new South African customers during 2020, and over 250,000 thus far in 2021. This puts Luno at 2.1 million users in South Africa.

According to the platform, an estimated 15% of South Africans have invested in Bitcoin – the second highest percentage in the world according to the Global Web Index, beating even the USA and Japan.

It’s also the fifth most popular finance app on iPhone and third on Android – ahead of most of Africa’s biggest banks.

Uncertainty over government regulation of cryptocurrency remains a major challenge to increased adoption in South Africa, however.

Luno Africa General Manager Marius Reitz previously said that the lack of regulatory framework has made it difficult for crypto platforms to operate bank accounts.

“In turn, this makes it very difficult for customers to buy Bitcoin with their local fiat currency,” Reitz said.

However, he said that regulators in South Africa have shown great willingness to engage with the cryptocurrency community to works toward pragmatic regulation.

The chart below shows the trading volume of transactions of the four biggest countries represented on Luno .


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Luno’s journey from a small startup to R121 billion in transactions