Ripple’s recent funding round, which raised $500 million at a $40 billion valuation, has generated significant buzz in the industry. The deal structure, as reported by Bloomberg, has sparked discussions due to its unique features.
Leading names in traditional finance such as Citadel Securities, Fortress Investment Group, Galaxy Digital, Brevan Howard, Pantera Capital, and Marshall Wace participated in the round, positioning themselves for success from the outset. Here’s why.
A Funding Round With Safety Measures
This deal incorporated safeguards rarely seen before. Investors had the option to sell their shares back to Ripple after three or four years at a guaranteed 10% annual return, unless the company goes public first. Ripple could also repurchase the shares but would need to offer a 25% annualized return instead.
Additionally, there was a liquidation preference in place, ensuring these investors are prioritized in case of significant events like a sale or bankruptcy.
Wall Street seeks exposure but values security in its investments.
XRP’s Influence on Ripple’s Valuation
Another noteworthy aspect is that approximately 90% of Ripple’s net asset value is attributed to XRP, based on insights from various funds. As of July, the company held $124 billion worth of the token, with a significant portion locked with scheduled releases.
XRP’s market performance has faced pressure, with a decline of 26.16% over the last 60 days and over 30% in the past 90 days amid challenging market conditions.
Despite the decrease, Ripple’s XRP holdings were still valued at $83.3 billion as of Sunday, surpassing the valuation used in the share sale.
A Pivotal Year for Crypto Fundraising
The Ripple transaction occurs within a year where crypto firms have collectively raised $23 billion, benefiting from a more supportive political landscape following Donald Trump’s return to power. Tether is also reportedly aiming to raise up to $20 billion with interest from major global investors.
However, the overall market scenario remains mixed.
Several crypto companies that went public in 2025, such as Circle, have witnessed sharp declines in their stock prices. Even American Bitcoin Corp., co-founded by Eric Trump, experienced a more than 50% plunge in minutes on December 2.
Ripple has stated that it currently has no plans or timeline for an IPO.
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