Ripple to buy back $285M shares from early investors and employees, valuing the crypto startup at $11 billion

Ripple Labs, a crypto startup best known for its XRP coins, is buying back $285 million worth of company shares from early investors and employees, according to information from two reliable sources cited by Reuters.

The deal, referred to as a tender offer, places the company’s valuation at $11.3 billion, a billion more than it was valued three years ago. Insiders revealed that investors can only sell a maximum of 6% of their holdings, and these sources opted to remain anonymous.

The privately-owned firm has officially confirmed the tender offer and outlined its intention to allocate $500 million for the buyback. This fund will be utilized to cover expenses related to the conversion of restricted stock units into shares and address tax obligations, Reuters reported.

According to Ripple’s CEO, Brad Garlinghouse, the company plans to conduct regular share buybacks to provide liquidity for investors. He also mentioned that there are no immediate plans for Ripple to go public in the United States due to regulatory uncertainties. Garlinghouse revealed that Ripple currently holds over $1 billion in cash and more than $25 billion in crypto, primarily in XRP coins.

This announcement follows Ripple’s recent legal victory in an ongoing legal battle with the U.S. Securities and Exchange Commission (SEC). A U.S. District Judge ruled that the sales of XRP on public exchanges were not considered unregistered securities offerings.

Despite the challenges posed by the SEC lawsuit, Garlinghouse mentioned that 95% of Ripple’s customers are non-U.S. financial institutions. He did not disclose the size of the payment business.

“Growing in the headwinds of the SEC lawsuit was certainly a challenge, but 95% of our customers are non-US financial institutions,” Garlinghouse said.

In May, we reported on Ripple’s first acquisition after the company bought Switzerland-based crypto custody startup Metaco for $250 million to facilitate cross-border transactions, while promoting the use of XRP.

As of Wednesday, XRP’s market capitalization stood at $30 billion, according to data from CoinMarketCap.

Founded in 2012 by Arthur Britto, Chris Larsen, and Ryan Fugger, Ripple provides a global real-time payment system that allows banks and financial institutions worldwide to transact directly with each other without the need for a central correspondent. Additionally, the company offers FX Market Making, a solution enabling enterprises to access cross-currency liquidity through a distributed network, allowing foreign exchange to be sourced externally from a competitive FX marketplace or an internal FX trading desk.