Ripple Labs Investors Receive Expanded Guarantees in $500 Million Deal
Date: 2025-12-09 Author: Oliver Abernathy Categories: BUSINESS
The $500 million deal, which values Ripple Labs at $40 billion, was unusual for the crypto industry. As Bloomberg reported, traditional investors—including Citadel Securities, Fortress Investment Group, and funds associated with Marshall Wace, Brevan Howard, Galaxy Digital, and Pantera Capital—insisted on additional terms, given the volatility of the digital asset market.
According to sources, investors were given the right to return their shares to the company in three or four years if Ripple Labs fails to go public. Upon exercise of this right, investors are guaranteed a fixed annual return of 10%. At the same time, Ripple Labs itself can, if it so chooses, initiate a buyback within the same timeframe, but with a commitment to provide a 25% annual return. The agreement also includes a liquidation priority—a mechanism that gives investors an advantage in the event of a sale of the company or its potential bankruptcy.
The deal documents noted that some funds value up to 90% of Ripple Labs's value based on the price and volume of the company's XRP token. As of July, Ripple Labs controlled approximately $124 billion in digital assets, a significant portion of which was subject to phased unlocking. Following the share sale announcement, the price of XRP has fallen 16% since the end of October and more than 40% from its summer highs. However, despite the decline, the valuation of Ripple Labs' XRP "treasury," according to Bloomberg, remains high—approximately $83.3 billion.
Experts emphasize the rarity of this type of deal structure. PitchBook CEO Kyle Stanford noted that guaranteed buybacks in the future could require the company to hold significant reserves or force it to raise new funding rounds. According to journalists' estimates, returning shares in four years at a 10% interest rate would cost Ripple Labs approximately $732 million.
The company noted that it has been actively repurchasing its own shares for several years, returning more than a quarter of its total to employees and early investors. FT Partners CEO Steve McLaughlin added that such financing models are not common among fast-growing tech companies.
Ripple Labs President Monica Long noted that the company has no specific plan to go public. However, the corporation continues its expansion strategy through acquisitions: in April, it agreed to acquire brokerage Hidden Road for $1.25 billion, and in the fall, GTreasury for $1 billion.
