VivoPower International has announced plans to originate up to $300 million in shares of Ripple Labs for the South Korea-based investment firm Lean Ventures. This strategic share deal is said to provide indirect exposure to approximately 450 million XRP tokens, which are valued at nearly $900 million at current market prices.
The structure of the deal, disclosed earlier, involves VivoPower’s digital asset unit, Vivo Federation, which will source the shares to create a dedicated investment vehicle managed by Lean Ventures. Notably, VivoPower has indicated that it will not deploy significant capital from its balance sheet for this arrangement. Instead, the company will act primarily as an originator and manager for the transaction, focused on generating revenue through fees and performance-based compensation linked to the assets under management.
VivoPower has set a target for net economic returns of around $75 million over three years from this initial $300 million investment. It’s important to note that these figures are based on internal estimates. The company characterizes its stake in Ripple Labs as offering exposure to “underlying” XRP, which is based on Ripple’s existing holdings of the token, without involving direct ownership of XRP.
This approach marks a continuation of VivoPower’s previously announced strategies related to XRP. In August, the company indicated plans to acquire up to $100 million in Ripple Labs shares as part of an XRP-focused treasury strategy, intending to leverage equity ownership for indirect exposure to the cryptocurrency.
Despite the strategic initiatives, VivoPower’s stock, traded as VVPR, closed at $2.83, reflecting a significant decline of 11.56% from the previous trading session. The trading volume reached approximately 340,600 shares, which is below its average daily volume, suggesting that the decline happened amid relatively low investor participation.
This new initiative emerges at a time of increasing institutional interest in XRP, spurred by recent developments that have clarified the regulatory landscape surrounding the cryptocurrency. The resolution of a long-standing legal dispute involving Ripple in the United States, along with the approval of spot XRP exchange-traded funds, has reduced legal uncertainties associated with the asset.
By structuring this deal through an investment vehicle tailored for South Korean investors, VivoPower and Lean Ventures appear to be capitalizing on the demand for indirect cryptocurrency exposure via traditional financial instruments. The presentation of such products to potential investors and their classification by regulators could significantly impact the adoption of similar strategies in other markets.
While VivoPower has expressed optimism about the transaction, the deal remains contingent on negotiations, market conditions, and the availability of Ripple Labs shares. The situation continues to evolve, and further updates are anticipated as the companies engage in discussions surrounding the arrangement.
