Ripple CEO Brad Garlinghouse speaks at the 2022 Milken Institute Global Conference held in Beverly Hills, California, USA on May 4, 2022.
Mike Blake | Reuters
Digital asset and infrastructure company Ripple announced Wednesday that it has raised $500 million in funding, raising its valuation to $40 billion.
The funding comes as the company expands its product base beyond just payments after a number of acquisitions.
Crypto and digital asset companies are looking to take advantage of what the industry sees as a more favorable environment in the United States following the election of President Donald Trump and the passage of landmark stablecoin legislation known as the GENIUS Act.
Closely related to Ripple XRP The funding round was led by funds managed by affiliates of Fortress Investment Group, affiliates of Citadel Securities, Pantera Capital, Galaxy Digital, Brevan Howard and Marshall Weiss, according to .
“A year of record growth”
“The decision to accept $500 million in new common stock reflects the strategic value of deepening relationships with financial partners whose expertise complements Ripple’s expanding global product suite,” Ripple said, adding that the company continues its “year of record growth.”
Ripple President Monica Long said in an interview with CNBC on Wednesday that the company didn’t need to raise money, but there was demand from institutional investors who wanted to take a stake in the company.
“We think it makes sense to bring them on board as a strategic partner and an investor to help build our future,” Long said.
Ripple is positioning itself as a fintech company that provides crypto assets and digital asset technology to institutional investors.
When Ripple was founded in 2012, the company initially focused on using blockchain technology to facilitate cross-border payments. The token XRP was used to quickly move fiat currency.
Since then, Ripple has strengthened its payments business and expanded into new areas through aggressive acquisitions. Ripple has announced that it has completed six acquisitions in just over two years.
Last year, the company launched its own stablecoin, a type of digital currency pegged to the U.S. dollar and backed by real-world assets. Because stablecoins can operate 24 hours a day, they are considered an important way to move funds quickly around the world. This year, Ripple acquired an enterprise stablecoin platform called Rail.
Beyond payments, Ripple has expanded into other business areas such as crypto custody, prime brokerage, and corporate treasury management.
Long said the company’s acquisition strategy focuses on companies that complement Ripple’s core payments business or allow it to expand into new areas.
“We continue to look at where new opportunities arise in these two respects,” Long said.
While other crypto-focused companies such as Circle have gone public, Long said that is not something Ripple is considering at this point.
“We are really happy to see crypto companies go public, which is great for the industry as a whole as it continues to mature,” Long said.
“We are not currently focused on an IPO. We have a balance sheet, growing liquidity, and are moving toward M&A and other major strategic alliances. We will remain private.”
Ripple’s funding comes amid continued volatility in the cryptocurrency market. This week, Bitcoin fell below the $100,000 level for the first time since June, wiping billions of dollars from the entire market.
