TL;DR
- Ripple secured $500M in a round that brought in funds such as Citadel and Brevan Howard and locked in guaranteed returns of 10% to 25% for the new investors.
- The company now carries obligations that could exceed $700M over four years.
- The company is trying to reduce its dependence on XRP through acquisitions like Hidden Road and GTreasury, along with a buyback program that has already covered more than 25% of its outstanding shares.
Ripple closed a $500M round that reshaped its financial structure and showed how the market still ties the company’s valuation to XRP. The funds that joined — Citadel, Fortress, Marshall Wace, Brevan Howard, Galaxy Digital and Pantera Capital — didn’t make a straightforward bet on Ripple’s growth. Instead, they negotiated terms that protect their returns even if the company falls short of its projections.
How Does the New Deal Work?
The new investors received a share package that guarantees a 10% annual return for three or four years. Ripple must buy back those shares if the funds decide to exercise the option. If the buyback happens earlier or if the company forces the exit, the cost rises to a 25% annual return. That obligation could exceed $700M over four years and forces the company to set aside capital, plan future cash flows and evaluate new funding sources before every move.
The participating funds estimated that nearly 90% of Ripple’s net asset value comes from XRP. In July, the company held a treasury worth $124B in tokens; after the recent drop, that figure has fallen to roughly $83.3B. XRP has lost about 16% of its value since late October and more than 40% from the high reached in July.
Ripple Looks Beyond XRP
Ripple is working to reduce that weight through acquisitions intended to expand its business beyond XRP. Its $1.25B purchase of Hidden Road and the $1B acquisition of GTreasury aim to strengthen its position in prime brokerage services and treasury management. This expansion adds to an ongoing share-buyback program that has already covered more than 25% of the company’s outstanding shares. Ripple isn’t moving toward an IPO for now and is prioritizing a solid balance sheet that can absorb its future obligations.
The crypto market has seen a year of heavy capital inflows and extreme volatility. That backdrop has fueled deals with strong protections for large investors and forces companies like Ripple to balance their growth strategy, their acquisitions and their financial commitments
