How to Buy Ripple Stock Before Its IPO
Ripple Labs provides financial services via blockchain technology. The company is best known for creating XRP (aka "Ripple"), the 5th most popular cryptocurrency in the world.
XRP was created as an alternative to SWIFT, a system banks and other financial institutions use to facilitate international money transfers. Leveraging blockchain technology, XRP acts as a bridge currency and can facilitate real-time transactions at a fraction of the cost of traditional methods.
In addition to XRP, Ripple Labs provides a number of other solutions which are faster, more transparent, and more cost-effective than traditional financial services.
However, the company has also been in the spotlight because of an ongoing lawsuit with the SEC.
In 2020, the SEC accused Ripple and its founders of violating securities laws by selling $1.3 billion of XRP before registering it. The company argued it was a commodity, not a security, and didn't need to be registered.
In July 2023, the court issued a summary judgment wherein both parties secured a partial victory, though the case is still dragging on.
The lawsuit has prevented Ripple Labs from becoming a public company, and there's no indication of when it will make its public debut.
Still, despite being a private company, there is a way to invest in Ripple Labs stock — if you qualify.
Can you buy Ripple stock?
Ripple Labs is a private company, which means it doesn't trade on any public exchange and you can't purchase shares of it in your regular brokerage account.
At this point, the company has not made a clear indication of when it plans to go public and has not made its initial IPO filing.
To date, the company has raised about $295 million from the private markets.
Future funding rounds look unlikely given the company bought back $285 million of its own shares in early 2024. Not only does this signal the company is bullish on its own future, it's also a good indication that it doesn't need any additional external funding.
But that doesn't mean you can't invest in it today.
How to buy Ripple stock in 2024
If you're an accredited investor, you can buy shares of Ripple Labs on the secondary market.
To qualify as an accredited investor, you need to either a) have an annual income of $200,000 as an individual or $300,000 as a married couple or b) have a net worth exceeding $1,000,000 (excluding your primary residence).
If you don't qualify as an accredited investor, you can skip down to the section for retail investors below.
1. How to buy Ripple stock as an accredited investor
Hiive is a secondary marketplace where accredited investors can buy shares of private companies before they go public.
As of the time of writing, there are 33 live orders for Ripple Labs on Hiive, making it one of the most actively traded stocks on the platform:
On Hiive, investors can buy shares directly from employees, venture capital or hedge funds, angel investors, or anybody else with shares to sell.
Investors can accept a seller's asking price as listed or place bids and negotiate with sellers. They can also add companies to their watchlist and get notified of any new transactions or listings.
See the current bids and asks for Ripple Labs on Hiive:
2. Can you invest in Ripple stock as a retail investor?
There is currently no way for retail investors to invest directly in Ripple Labs. However, you can invest in its cryptocurrency called XRP.
Keep in mind that cryptocurrencies are extremely risky and that an investment in XRP is not an investment in Ripple Labs.
That said, the pending lawsuit against Ripple has made it more difficult to buy XRP, as several U.S.-based exchanges have delisted the cryptocurrency (most notably Coinbase). You can still buy it on Binance and several other brokerages, like eToro.
Alphabet's (GOOGL) venture capital arm Google Ventures also invested in Ripple Labs back in 2015, though the amount invested was less than $30 million, which is just a fraction of Alphabet's $1.99 trillion market capitalization.
As a retail investor, you may be best off waiting for Ripple Labs' IPO.
How to buy the Ripple IPO
Ripple Labs has not made any IPO filings with the SEC.
The company's CEO, Brad Garlinghouse, mentioned an IPO back in 2020, though the SEC lawsuit has delayed those plans.
When it does go public, the Ripple stock symbol might be something like RLAB, RIPL, or XRP. When it does finally have a ticker, you'll need a brokerage account to buy shares.
If you don't have a brokerage account, we recommend Public.
On Public, you can Invest in stocks, ETFs, Treasuries, and cryptocurrencies, all on one of the most well-designed investing platforms.
Who owns Ripple?
Ripple has been funded by 43 investors including Pantera Capital, Andreessen Horowitz, Blockchain Capital, Seagate Technology, Google Ventures, Siam Commercial Bank, Westpac Banking Corporation, and others.
In addition to its private equity investors, Chris Larse, an angel investor and co-founder of Ripple, owns 17% of the company. Brad Garlinghouse, the current CEO, also owns 6.3%. Larsen and Garlinghouse also own large amounts of XRP.
Ripple Labs is a private company, so it isn't required to disclose its ownership.
Ripple valuation chart
Ripple Labs most recently raised money in its Series C round in December 2019. In that round, the company raised $200 million at a pre-money valuation of $9.8 billion.
Since then, Ripple Labs has repurchased its shares in two different tender offers.
The first came in January 2022, when it repurchased the $200 million it had raised in its Series C at a valuation of $15 billion.
The second came in January 2024, when the company announced it would be buying back $285 million worth of shares at a valuation of $11.3 billion, nearly 25% lower than the valuation two years earlier.
Including its two share buybacks, here's a look at how Ripple Labs' valuation has changed over time:
Following the second repurchase in January 2024, CEO Brad Garlinghouse said the company:
- Would complete more share buybacks in the future on a regular basis to provide liquidity for investors
- Has no plan to go public in the United States any time soon due to regulatory uncertainty
- Holds over $1 billion cash and over $25 billion worth of crypto, mostly XRP coins, on its balance sheet following the repurchase
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