Two investors, including an early-stage shareholder in San Franciso-based blockchain startup Ripple, could exit their positions in the company soon, over concerns that the company is overvalued at $10 billion.
Ripple completed a $200 million Series C funding round in December which brought the company’s market valuation to $10 billion. That round led by closed-end investment fund, Tetragon also counted SBI Holdings and Route 66 Ventures as participants.
However, sources from the BTC Times with knowledge about investor liquidations have mentioned that two investors in Ripple are looking to exit their positions in the company below the $10 billion December valuation. More precisely, the source is quoted as saying:
I have access to two blocks of Ripple [equity] at a substantial discount to the last fund raise.
Information was also revealed regarding the level of steepness at which the investors are looking to sell-off their equity in Ripple. These two blocks are reported being sold by an American investor and Chinese investor at a 35-40% discount to the Series C $10 billion valuation.
At such a discount, Ripple would have an over-the-counter valuation of $6-6.5 billion, which may seem a bargain for one of the industry’s leading companies. Ripple was the only blockchain-related company named in the prestigious CNBC’s Disruptor 50 List published in June.
Time will now tell whether the early investor exit if it happens at this point, will hurt Ripple’s chance of becoming a publicly-traded company anytime soon. Traditionally, investors selling off their equity in a startup signifies lose of confidence that an IPO is imminent for the company.
Meanwhile, Ripple CEO, Brad Garlinghouse had shared his thoughts earlier this year on the prospects of blockchain-related companies including Ripple eventually going public within the next few years.
While admitting that Ripple may not be the first in the industry to achieve the feat, Garlinghouse expressed confidence that the company will “be on the leading side,” when that time comes.
