Ripple recently concluded a significant $500 million share sale, drawing in some of the most influential players in global finance. According to reports, investors sought comprehensive downside protections that resemble structured credit arrangements more than standard venture capital deals. Notable participants in this funding round, which valued Ripple at an impressive $40 billion, included affiliates of Citadel Securities, Fortress Investment Group, Marshall Wace, Brevan Howard-linked entities, Galaxy Digital, and Pantera Capital.
Despite the high valuation, behind the scenes, many investors regarded their stake as a concentrated bet on a highly volatile asset. It was noted that around 90% of Ripple’s net asset value was tied to XRP, the company’s closely associated token that operates with a degree of legal separation from Ripple itself. As of July, Ripple held approximately $124 billion worth of XRP in its treasury at prevailing market prices.
To mitigate the inherent risks associated with such exposure, participating funds negotiated strong protective measures. These included provisions allowing them to sell back their shares to Ripple after three or four years at a guaranteed annualized return of 10%. If Ripple were to force a buyback, investors would benefit from a 25% annualized return. Additionally, a liquidation preference has been established, granting these investors priority over legacy shareholders in the event of a sale or insolvency.
Such terms create a synthetic safety net under investor capital, a structure that is not commonly found in late-stage tech financings but is becoming increasingly prevalent as traditional finance adapts to the volatility characteristic of the crypto market. In recent weeks, XRP experienced a significant downturn, falling approximately 40% from its mid-July peak as the broader crypto landscape faced challenges.
As the cryptocurrency sector evolves, U.S. spot XRP ETFs are projected to soon exceed $1 billion in inflows, having enjoyed a 15-day streak of net investments. This surge has likely been fueled by the successful resolution of Ripple’s court case with the SEC, which clarified XRP’s regulatory standing.
Efforts to contact Ripple’s press inquiry and media representatives for further comments have not yet yielded responses as of early Monday morning.
