Blockchain start-up Ripple says it’s raised a $200 million investment round, lifting its valuation to a huge $10 billion.
The fundraising was led by New York investment company Tetragon, Ripple said Friday, while Japan’s SBI Holdings and Virginia-based venture capital firm Route 66 Ventures also invested.
Founded in 2012, Ripple rose to fame in late 2017 as the value of XRP, a cryptocurrency used by the firm, skyrocketed in value alongside a multitude of other virtual coins.
The company uses XRP to facilitate cross-border transactions for its network of financial institutions, while it also employs an interbank messaging system — think of it as a blockchain-based alternative to Swift — that’s used by banks to send money around the world.
“We are in a strong financial position to execute against our vision,” said Ripple CEO Brad Garlinghouse in a statement. “As others in the blockchain space have slowed their growth or even shut down, we have accelerated our momentum and industry leadership throughout 2019.”
While XRP rose in excess of $3 back in January 2018, the world’s third-largest digital currency has since pulled back significantly and currently sits at around 19 cents. The cryptocurrency was up over 3% Friday on the back of Ripple’s funding news.
Ripple sources a significant portion of its income from selling its holdings in XRP. According to industry outlet The Block, Ripple has sold $260 million worth of the cryptocurrency over the last year. The other big chunk of its revenue comes from deals with banks and financial institutions that use its blockchain technology for money transfers.
Ripple says it now has over 300 financial services customers globally. The firm has signed partnership deals with giants in the industry ranging from Santander to American Express.
Digital currencies hit the headlines this year after a brutal sell-off among such assets in 2018, with big companies like Facebook and J.P. Morgan making moves in the space. Facebook in particular has caught the attention of both investors and regulators, after it released proposals for its ambitious cryptocurrency project Libra.
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