Ripple moves to diversify, with $25m of XRP to VC and more to come

Posted: 12 April 2018 12:16 pm
Ripple battered - CFI

With competition coming to the crypto-money transfer space, diversification is key for Ripple.

Ripple has invested $25 million in XRP in the Blockchain Capital venture capital fund, it announced. This takes the total funding up to $150 million, with the goal of investing in entrepreneurial teams that are using blockchain technology, and identifying new use cases for Ripple and XRP.

"While Ripple’s primary focus has been to remove friction from cross-border payments, the investment in Blockchain Capital’s fund provides an opportunity to support and develop additional use cases beyond payments," Ripple announced. "As the ecosystem around blockchain continues to expand and develop, Ripple will look to support new use cases of the technology including more investments in business use cases developed by entrepreneurial teams and funds."

This marks a somewhat unique case of a startup, the Ripple company, investing in venture capital rather than the more typical reverse.

"There are entire verticals — such as healthcare or identity management — that could benefit from blockchain or distributed ledger technology," said Bart Stephens, co-founder and managing partner of Blockchain Capital. "Whether it’s using XRP, bitcoin or just the underlying blockchain technology, our goal is to find the best projects and give them the resources to be successful companies that deliver value to customers for the long term."

One common critique of Ripple XRP as a speculative investment has been the lack of applications for the token itself, with Ripple's more popular xCurrent product not requiring it, and limited appetite for the xRapid solution which does use the token.

Diversification might also be an important long term step for Ripple, which has been working hard to break out of its silo recently. This is probably a smart business move. There is no shortage of more diverse competitors who plan to use crypto in the international money transfer business. Without diversifying its products to distributed ledger solutions more broadly, Ripple might be at a serious competitive disadvantage down the line.

"Blockchain Capital is the premiere fund for any project looking to get off the ground in the blockchain space. They have a proven track record for finding and funding the projects that matter," said Patrick Griffin, SVP of Strategic Growth at Ripple. "This is the first fund that we've contributed to, and it won't be the last. We plan to be major players in shaping the future generation of blockchain or crypto companies."

Disclosure: At the time of writing the author holds ETH, IOTA, ICX, VEN, XLM, BTC, NANO

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