Ripple Company Report
April 3, 2019

Ripple Company Report

Executive Summary

Chris Larsen and Jed McCaleb founded Ripple in 2012 with the goal of using Blockchain technology to simplify cross-border payments. Today, Ripple is one of very few companies to successfully build Blockchain-based products. Over 200 financial institutions across the globe are piloting Ripple’s products. To create faster and more efficient transactions, Ripple introduced XRP, a cryptocurrency to run on the RippleNet platform. XRP is now one of the top 3 cryptocurrencies traded on the global exchanges, after Bitcoin and Ethereum. The company created 100 billion XRP coins and releases them via a series of escrows into the market to minimize price volatility.

Ripple has raised over $90 million over two funding rounds from major investors like Blockchain Capital, Andreessen Horowitz and Google Ventures. The company has enjoyed steady growth by forging partnerships with several banks and payment companies. Based on past M&A, public comps in the payments sector, and secondary transactions, we believe investors could value Ripple at a premium “high-teens” EV/Revenue multiple. Ripple operates in a market potentially worth $1 trillion dollars, thanks in part to shifting consumer behavior and inefficiencies in the existing payment methods. The company’s RippleNet, the first cross border payments platform built on Blockchain, is a safe, efficient and reliable alternative to existing payment methods. We believe Ripple’s technology and large customer base makes it an attractive target to some large financial institutions trying to adapt to a fast changing industry.

However, investors should exercise caution about Ripple and the broader Blockchain ecosystem. Several competitors, including large financial institutions, existing payment processing companies and upcoming Blockchain startups, are chasing the same market. Blockchain is a still new technology with safety and reliability problems that the industry needs to overcome before businesses adopt it. The lack of regulation over cryptocurrencies and Blockchain companies will continue to keep XRP prices volatile and further depress Ripple’s valuation and path to profitability.

PLEASE READ THESE IMPORTANT LEGAL NOTICES & DISCLOSURES

This article does not constitute an offer to provide investment advice or service. Registered representatives of SharesPost Financial Corporation do not (1) advise any member on the merits or prudence of a particular investment or transaction, or (2) assist in the determination of fair value of any security or investment, or (3) provide legal, tax, or transactional advisory services.

Securities referenced in this article may be offered by SharesPost Financial Corporation, member FINRA/SIPC. SharesPost Financial Corporation and SP Investments Management are wholly owned subsidiaries of SharesPost, Inc. Certain affiliates of these entities may act as principals in such transactions.

Investing in private company securities is not suitable for all investors. An investment in private company securities is highly speculative, involving a high degree of risk, and investors should be prepared to withstand a total loss of your investment. Private company securities are also highly illiquid and there is no guarantee that a market will develop for such securities. Each investment also carries its own specific risks and investors should conduct their own, independent due diligence regarding the investment, including obtaining additional information about the company, opinions, financial projections and legal or investment advice.

Accordingly, investing in private company securities is appropriate only for those investors who can tolerate a high degree of risk and do not require a liquid investment.

SharesPost, the SharesPost logo, My SharesPost, the SharesPost Index, and SharesPost Investment Management are all registered trademarks of SharesPost, Inc. All other trademarks are the property of their respective owners.

Copyright SharesPost, Inc. 2020. All rights reserved.

PLEASE READ THESE IMPORTANT LEGAL NOTICES & DISCLOSURES

This article does not constitute an offer to provide investment advice or service. Registered representatives of SharesPost Financial Corporation do not (1) advise any member on the merits or prudence of a particular investment or transaction, or (2) assist in the determination of fair value of any security or investment, or (3) provide legal, tax, or transactional advisory services.

Securities referenced in this article may be offered by SharesPost Financial Corporation, member FINRA/SIPC. SharesPost Financial Corporation and SP Investments Management are wholly owned subsidiaries of SharesPost, Inc. Certain affiliates of these entities may act as principals in such transactions.

Investing in private company securities is not suitable for all investors. An investment in private company securities is highly speculative, involving a high degree of risk, and investors should be prepared to withstand a total loss of your investment. Private company securities are also highly illiquid and there is no guarantee that a market will develop for such securities. Each investment also carries its own specific risks and investors should conduct their own, independent due diligence regarding the investment, including obtaining additional information about the company, opinions, financial projections and legal or investment advice.

Accordingly, investing in private company securities is appropriate only for those investors who can tolerate a high degree of risk and do not require a liquid investment.

SharesPost, the SharesPost logo, My SharesPost, the SharesPost Index, and SharesPost Investment Management are all registered trademarks of SharesPost, Inc. All other trademarks are the property of their respective owners.

Copyright SharesPost, Inc. 2020. All rights reserved.