Despite an opaque regulatory climate impeding its growth, San-Francisco-based Ripple was recently found to be the fourth largest fintech company in the world. This was revealed in a report by CB Insights who compiled data on the 66 biggest VC-backed fintech companies with over $1 billion in valuation.
The real-time gross settlement system, currency exchange, and remittance network company founded by Jed McCaleb and built by Arthur Britto and David Schwartz is worth $10 billion. It is usurped only by San Francisco-based Stripe, Shanghai-based Lufax, and India-based Paytm which are worth $36 billion, $39.4 billion, and $16 billion respectively.
Since its launch in 2012, Ripple has built upon a distributed open source protocol and supports tokens representing fiat currency, cryptocurrency, commodities, or other units of value such as frequent flyer miles or mobile minutes. Ripple’s claim is based around enabling “secure, instant and nearly free global financial transactions of any size with no charge backs.” It employs a native cryptocurrency known as XRP.
Today the company has over 300 clients using its payments technology to shift money across borders. While late last year, Ripple raised $200 million in a Series C funding round led by SBI Group, Tetragon, and Route 66 Ventures, the company is not quite ready to file an IPO due to regulatory field of crytpocurrency not necessarily providing a level playing field for growth.
Despite its success, Ripple faced an uphill battle this year unlike most fintechs who surged during the pandemic. On this, the company’s CEO Brad Garlinghouse stated in “The Scoop” podcast that Ripple would have already signed more customers for its On-Demand Liquidity platform and the XRP ledger if there were more regulatory certainty.
That said, Ripple owns more than half of the total supply of crypto asset XRP whose market cap sits at $11.6 billion and surged to $17,000 apiece at the time of writing. The company also purchased a $50 million stake in remittance platform MoneyGram last year.
Garlinghouse has also shared that Ripple has sold $83.9 million in XRP in the third quarter of 2020 to support its crypto-based remittance platform, On Demand Liquidity. Nevertheless, the regulatory environment will continue to impact blockchain start-ups like Ripple.