Komal Joshi · Oct 19, 2020 . 6min read
Ripple may not be worth $10 billion as Investors Plan to Exit
These early investors have access to blocks of Ripple [equity] and are planning to offset at a discount
By Victor Ugochukwu · Aug 12, 2020 . 6min read
A recent report from BTC Times suggests Ripple’s $10 billion valuations may not hold true as two of its early investors plan to exit.
According to the report, a source reveals that two investors in Ripple are attempting to offload equity privately. More interesting is the fact that these investors plan on offloading at a steep discount.
Interestingly, Ripple in December announced the successful closure of a Series C round. Having raised $200 million in that raise, it was subsequently valued at around $10 billion. Clearly, with this valuation, Ripple towers above one of crypto’s first unicorn – Coinbase. Earlier, Coinbase was valued at $8 billion during a 2018 funding round.
Consequently, the $10 billion valuation Ripple claims appear to be falling apart with two of Ripple’s early investors planning to exit at below the December valuation.
Furthermore, as BTC Times reports, these early investors have access to blocks of Ripple [equity]. The publication further states
These two blocks are purportedly being sold by an American investor and Chinese investor at a 35-40% discount to the valuation given to Ripple by Series C round investors. This implies the company has an over-the-counter valuation of $6-6.5 billion.
Ripple’s future IPO date may be miles away, perhaps the reason for Investors plan to exit.
Strikingly, Brad Garlinhouse while speaking to the Wall Street Journal during WEF 2020 edition had said according to the tweet
“In the next 12 months, you’ll see IPOs in the crypto/blockchain space. We’re not going to be the first and we’re not going to be the last, but I expect us to be on the leading side… it’s a natural evolution for our company.”Brad Garlinghouse, Ripple CEO speaking to WSJ at WEF
A bold statement like this should come with investor confidence and future expectations of a possible public listing. Consequently, this could also mean a massive fortune for early investors. Surprisingly, this is not the case at least not the kind of response one would have imagined from investors who are always profit-driven.
Another possible reason for these early Ripple investors planning to exit might be the uncertainty surrounding any eventual IPO. It’s still unclear as to whether Ripple is a security or not. If then it is, then the digital asset company would have flouted some stiff security laws. Consequently, that means no IPO in sight.
However, the company seems to be on an investment-spree, especially with a high profile such as MoneyGram which has since expanded into Sri Lanka. The company owns approximately 10% of MoneyGram’s common shares. It also commits to purchase up to $30 million more of the securities in the future.
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