Bitcoin Firm Ripple Gets $55 Million In Funding
September 15 2016 - 9:40AM
Dow Jones News
Ripple, the San Francisco-based startup building a bitcoin-like
payments platform aimed at banks, announced a $55 million Series B
funding round on Tuesday, bringing its total capital to about $93
million.
The move makes it one of the best capitalized startups in the
blockchain industry, where firms use so-called open ledgers to
solve a wide variety of technology challenges.
New and existing investors were involved in the new Ripple
funding round. New investors included Accenture Ventures, SBI
Holdings, SCB Digital Ventures, Standard Chartered PLC, and the
investment arm of Thailand's Siam Commercial Bank. Existing
investors that joined in this round included a Banco Santander SA
venture fund, the venture arms of CME Group Inc. and Seagate
Technology, and Venture 51.
The new funds give the company "tons of runway," said CEO Chris
Larsen. "It's possible we never have to raise money again."
The firm also announced several new commercial clients signed
long-term contracts to integrate Ripple's services into their own
banking platforms, including two of the new investors: Standard
Chartered and Siam Commercial. Other banks that have signed
contracts include Westpac, National Australia Bank, Mizuho
Financial Group, MBO Financial Group, and Shanghai Huarui Bank. The
contracts are generally multiyear deals, the company said, and
involve licensing fees, integration agreements, and in some cases
transaction fees, though that last is a negligible part of the
agreement.
At $93 million, Ripple trails only Circle Internet Financial
($136 million), 21 Inc. ($121 million), and Coinbase ($116 million)
in terms of capital raised among bitcoin and blockchain firms,
according to news and research site Coindesk. Funding in the sector
appears to have slowed down recently. About $484 million was
invested in the sector in 2015. So far this year, including
Ripple's latest, the total is about $341 million.
The race to turn blockchain-based networks, which originally
powered trading of bitcoin, has intensified. In August, R3 CEV
unveiled its offering, called Concord. It's a platform that takes
its cues from bitcoin, but makes significant changes to appeal to
banking customers. R3 counts more than 60 banks globally as
partners.
Ripple's services have changed significantly since its founding
in 2013, and like R3's are aimed at appealing to banks. Even back
then, Ripple's platform resembled bitcoin's, but differed in
significant ways. The latest iteration of its platform move even
further away from a decentralized, fully transparent open ledger,
and that is something that was a key sticking point for banks, Mr.
Larsen said.
"The banks don't like showing their aggregate data to the
world," he said. What Ripple has developed is a system, which it
calls interledger, that allows banks to transact with each other
directly, without any public ledger that would record and transmit
the data.
The immediate focus is on cross-border transfers, a process that
is currently cumbersome and generally expensive, and what Ripple
describes as high-volume, low-value transactions, in other words,
generally smaller transactions like, for example, payments on
Amazon and other online platforms, or rides in Uber cars.
Mr. Larsen said the firm currently has 10 of its clients using
the product commercially, with another 30 working on integrating
Ripple into their systems. He expects more of these banks to go
live on the platform this year, and start marketing their new,
Ripple-based products in 2017.
"I think the tipping point has been reached," Mr. Larsen
said.
Write to Paul Vigna at paul.vigna@wsj.com
(END) Dow Jones Newswires
September 15, 2016 09:25 ET (13:25 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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