Ripple Labs Nears Close of $30 Million Funding Round

January 26, 2015 18:14 UTC
Image Credit: Ripple Labs

Ripple Labs, the company behind the Ripple protocol and the Codius smart contract platform, is close to finalizing the deal on a new $30 Million USD funding round.

Wall Street Journal’s Venture Capital blog reports that it has received confirmation from Ripple labs that it is working on closing the deal for its Series B funding round. According to their analysis, the deal would give Ripple Labs (RL) a post-money valuation of $100 million.

This valuation stands in contrast to the apparent market valuation of XRP, the token which fuels the Ripple protocol. The company’s primary value comes from the 69,021,601,800 XRP tokens minted when the protocol first went live and which RL still holds. At the current price of $ 0.016747 per XRP this haul would be valued at over $1.1 billion ($1,155,904,765). Obviously, however, there is no way that the company could sell almost 70% of the coin’s supply at current market price.

The Investors

Speculation as to the names of investors will inevitably turn towards the high profile investors who poured money into Ripple Labs’ Series A investment round. These included luminaries such as:

  1. Andreessen Horowitz
  2. Google Ventures
  3. IDG Capital Partners
  4. Bitcoin Opportunity Fund
  5. Camp One Ventures
  6. Core Innovation Capital
  7. FF Angel
  8. Lightspeed Venture Partners
  9. Vast Ventures
  10. Venture51.

Ripple Labs has consistently taken a ‘top down’ approach to promoting its payments protocol, targeting banks and other financial institutions rather than trying to build a user base as most cryptocurrencies do. This approach saw significant success in the final quarter of 2014, as several banks, including CBW Bank and Cross River Bank in the United States, announced that they would adopt the protocol.

The Ripple protocol itself uses a distributed consensus ledger rather than a block chain. In addition to having its own native cryptocurrency it is also used to transfer ‘IOUs’ between different parties who trust the same issuer or ‘gateway’. Its proponents claim that this makes it ideal as a mechanism for improving the settlement of international payments between banks. The current system is often costly and can take days, as the current systems were developed in the twentieth century. Many bankers now agree that the emergence of a digital system for real-time settlements is long overdue, and Ripple’s proponents believe they know how that system should look.

To put the $30 million raised by RL into some perspective, Coinbase recently received investments totalling $75 million.

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