Ripple has secured a $500 million private funding round, valuing the company at $40 billion, with a deal structure that provides Wall Street investors with significant downside protection. The investment, finalized in November, was led by Citadel and Fortress Investment Group, with participation from funds tied to Marshall Wace, Brevan Howard, Galaxy Digital, and Pantera Capital.
The deal's terms are notably investor-friendly. Investors secured put options allowing them to sell their shares back to Ripple after three or four years for a guaranteed 10% annual return, unless the company goes public first. If Ripple initiates a buyback, it must offer a 25% annualized return. The agreement also includes a liquidation preference, ensuring these investors are first in line for payout in the event of a company sale or failure.
Kyle Stanford, director of U.S. venture capital research at PitchBook, noted such structures are rare and typically associated with non-traditional venture firms. He warned they could pressure Ripple to burn cash or raise new capital to meet obligations, potentially shrinking funds for daily operations. A full four-year buyback would cost the company approximately $732 million.
A central point of discussion is Ripple's heavy reliance on its XRP holdings for valuation. Two funds in the round estimated that at least 90% of Ripple's net asset value derives from the XRP token. As of July, the company held $124 billion worth of XRP, though much is subject to lockups and scheduled releases. Despite a significant market downturn—XRP is down about 16% since October 31 and over 40% from its mid-July peak—Ripple's XRP stash was still valued at around $83.3 billion as of a recent Sunday, well above the company's $40 billion valuation.
The funding arrives during a major year for crypto fundraising, with firms raising about $23 billion in 2025 amid a perceived friendlier regulatory environment following Donald Trump's return to the White House. This figure excludes Tether's separate reported efforts to raise up to $20 billion. However, the public market for crypto equities has struggled, with shares of recently listed firms like Circle Internet Group and American Bitcoin Corp. experiencing sharp declines.
Ripple President Monica Long stated in November that the company has "no plan, no timeline" for an IPO. The firm has also repurchased more than 25% of its outstanding shares. Unlike exchanges or stablecoin issuers, Ripple's value proposition remains tightly linked to the XRP it controls, a point of debate even among its new investors.
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