The US Treasury Department’s recent $700,000 fine punishing Ripple Labs for allegedly violating the Banking Secrecy Act in the issuance of its cryptocurrency has not hurt its ability to raise money from venture capital.
The developer of the Ripple payment protocol just ended a $28 million Series A funding round that includes China’s IDG Capital Partners and the venture arms of American futures firm CME Group and global data storage company Seagate Technology.
Additional new investors include Jerry Yang’s AME Cloud Ventures, ChinaRock Capital Management, China Growth Capital, and Wicklow Capital, the investment vehicle for Dan Tierney and Stephen Schuler, co-founders of GETCO (now KCG).
Ripple Labs CEO and co-founder Chris Larsen said this about the funding round:
Our mission is to modernize decades-old payments infrastructure with IP-based technology so value moves around the world as freely, easily, securely and transparently as information on the web today. Financial institutions, market makers and corporations are laying the foundation for this Internet of Value, contributing and providing liquidity for global payments. With investors like CME Group and Seagate joining the fold, we’re well positioned to accelerate adoption amongst these key customers.
Dave Morton, Senior Vice President, Finance and Treasury at Seagate Technology, commented on the company’s investment:
Managing a global treasury operation and supply chain finances for one of the world’s largest high-tech storage technology companies puts us in a unique position to understand the frictions and pain points in funds transfer. With its real-time settlement capabilities, we recognize the opportunity for Ripple to reduce money transfer costs, create transparency, and increase working capital in corporate treasury use cases. Banking and corporate applications are just the tip of the iceberg for a technology like Ripple, and we’re excited to support the team’s pursuit of those opportunities.
Rumi Morales, Executive Director, Strategic Investment Group at CME Group, added:
Ripple is transforming global settlement architecture, and its momentum in payments will give way to an expanding portfolio of use cases in the financial markets. Joining this funding round is another example of how we are investing in technologies that impact our industry.
Ripple Labs believes the latest fundraising round will help the company to grow internationally, There is a significant emphasis on Asia with new funding from key Chinese investors with deep, local expertise in fintech and financial markets.
Li Feng, partner at IDG Capital Partners, early investors in Baidu, Tencent, Xiaomi and CreditEase, will also join the Ripple Labs Board of Directors. Feng commented:
We are excited to build on our relationship with Ripple Labs, especially as they expand their presence in Asia. Growing their influence in key regions like Asia will help activate new markets, further accelerating the use of Ripple as a real-time settlement protocol by the world’s leading financial institutions.
Ripple Labs management also sees the mix of traditional venture funds and strategic investors as supporting its move to focus on not only banking, but also market making and new corporate treasury use cases globally.
In the US and Europe, Ripple has formed partnerships that include Earthport, Fidor Bank, Cross River Bank and CBW Bank.