San Francisco-based Ripple announced it has received $55 million in a Series B funding round. The capital injection makes the startup one of the largest funded blockchain-based projects in the industry.
Also read: New Santander App Combines Ripple & ApplePay
$55 Million Gives Ripple Labs ‘Tons of Runway’
The permissioned blockchain has continued to make progress since its current incarnation launched in 2012. With this latest funding round the company is now working with a total of $93 million. According to CEO Chris Larsen’s statements to the Wall Street Journal, the company may “never have to raise money again.”
Many legacy financial institutions took part in the series B round including Accenture, Banco Santander, SBI Holdings, Standard Chartered PLC, Thailand’s Siam Commercial Bank, and more. Larsen explains the latest investment gives the firm “tons of runway” to progress their efforts.
Ripple’s newly acquired funds make it one of the largest blockchain-based projects, trailing slightly behind Coinbase, 21 Inc., and Circle Financial. In addition to the capital injection, the startup has also partnered with many new institutions, signing long-term contracts. Some of the contracts are multi-year agreements with groups such as Shanghai Huarui Bank, National Australia Bank, Westpac, and others.
System Aimed at Banks, Corporations
Ripple works on slightly different principles to other blockchain and distributed ledger systems. Intended as an instant settlement system on which any digital asset may be exchanged, it has always been more compelling to the corporate world than everyday consumers.
Nodes on the Ripple network run a consensus algorithm to confirm value transfers, rather than mining. 100% of the network’s native currency, XRP, already exists. Although XRP may rise and fall in value, it is intended as a “bridge” between other assets, rather than as money to spend.
Ripple CEO Chris Larsen explains to the WSJ financial institutions prefer a permissioned blockchain in contrast to a decentralized ledger stating:
The banks don’t like showing their aggregate data to the world.
Big Banking Partners and Competition On the Horizon
Ripple also has competition from highly funded projects such as the Linux Foundation-led Hyperledger Project and the R3 consortium. All these distributed ledger based organizations have attracted interest from the traditional banking industry. For example, R3 CEV has roughly 60 large financial institution partners. However, many of these banks have their hands in all three blockchain projects.
Ripple’s focus currently is directed at cross-border transfers. Santander became the first UK bank to utilize Ripple’s system to facilitate a cross-border payment. Larsen tells the WSJ that ten clients have already integrated with Ripple. The CEO claims to have another 30 businesses planning to do so with more announcements in the near future. Larsen stated in the startup’s blog announcement:
“Our mission is to make cross-border payments truly efficient for banks and their customers, and in doing so, lay the foundation for an Internet of Value where the world moves money as easily as information. We’re thrilled to have these world-class investors joining forces with us to help make this vision a reality.”
The traditional banking industry seems to be very keen on permissioned distributed ledger systems. Furthermore, funding and partnerships with legacy institutions show organizations that provide centralized blockchains mean business. Ripple’s Chris Larsen believes this is the case, telling the WSJ, “I think the tipping point has been reached.”
What do you think about Ripple’s Series B funding? Let us know in the comments below.
Images via Shutterstock, and Pixabay.
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