Ripple acquires Switzerland-based crypto custody startup Metaco for $250 million
Ripple, a crypto startup best known for its cryptocurrency XRP, has acquired Switzerland-based crypto custody startup Metaco in a deal valued at $250 million, making it the company’s first major acquisition.
In an announcement on Tuesday, Ripple said that the acquisition will enable it to diversify into custody solutions and bring a new revenue stream to the company. Metaco is a provider of digital asset custody and tokenization technology. Its technology allows financial institutions to store and manage digital assets. Its clients include Citi, BNP Paribas, and Societe Generale’s digital asset arm.
In a statement, Ripple CEO Brad Garlinghouse said he expects increased demand from institutional investors for crypto custody services. “By focusing on the infrastructure … you’re not really subject to the same gyrations of the crypto winters,” Garlinghouse said. He also added, “If ultimately you’re solving a clear problem at scale for these customers, there’s going to be demand there.”
Garlinghouse stated that the fact that Metaco is located in Switzerland and has employees who are not from the United States made the company more attractive, particularly in light of increased regulatory actions against cryptocurrency firms by U.S. authorities.
“Metaco is a proven leader in institutional digital asset custody with an exceptional executive bench and a truly unmatched customer track record,” said Brad Garlinghouse, CEO of Ripple. “Through the strength of our balance sheet and financial position, Ripple will continue pressing our advantage in the areas critical to crypto infrastructure. Bringing on Metaco is monumental for our growing product suite and expanding global footprint.”
Metaco was founded in Switzerland in 2015. The company helps both financial and non-financial institutions in the secure establishment of their digital asset operations. At the heart of the company’s offerings lies its flagship product, Harmonize™, a crucial orchestration platform designed specifically for digital assets.
According to CoinGecko, Ripple, currently ranked as the sixth largest cryptocurrency globally, has approximately $23 billion worth of its coin in circulation. Ripple disclosed that over half of the $250 million acquisition was paid in cash, with the remaining amount settled through equity.
Ripple, being a privately-owned company, had previously shown interest in acquiring assets, including those from bankrupt lender Celsius. In December 2020, Ripple faced legal action from the U.S. Securities and Exchange Commission (SEC), which accused the company of conducting an unregistered securities offering amounting to $1.3 billion.
Founded in 2012 by Arthur Britto, Chris Larsen, and Ryan Fugger, Ripple offers a global real-time payment system that enables banks and financial institutions around the world to directly transact with each other without the need for a central correspondent. The company also offers FX Market Making, a solution enabling enterprises to gain access to cross-currency liquidity through a distributed network that allows the foreign exchange to be externally sourced from a competitive FX marketplace or an internal FX trading desk.