Ripple, the San Francisco-based startup building a bitcoin-like payments platform aimed at banks, announced a $55 million Series B funding round on Tuesday, bringing its total capital to about $93 million.
The move makes it one of the best capitalized startups in the blockchain industry, where firms use so-called open ledgers to solve a wide variety of technology challenges.
New and existing investors were involved in the new Ripple funding round. New investors included Accenture Ventures, SBI Holdings, SCB Digital Ventures, Standard Chartered PLC, and the investment arm of Thailand’s Siam Commercial Bank. Existing investors that joined in this round included a Banco Santander SA venture fund, the venture arms of CME Group Inc. and Seagate Technology, and Venture 51.
The new funds give the company “tons of runway,” said CEO Chris Larsen. “It’s possible we never have to raise money again.”
The firm also announced several new commercial clients signed long-term contracts to integrate Ripple’s services into their own banking platforms, including two of the new investors: Standard Chartered and Siam Commercial. Other banks that have signed contracts include Westpac, National Australia Bank, Mizuho Financial Group, MBO Financial Group, and Shanghai Huarui Bank. The contracts are generally multiyear deals, the company said, and involve licensing fees, integration agreements, and in some cases transaction fees, though that last is a negligible part of the agreement.
At $93 million, Ripple trails only Circle Internet Financial ($136 million), 21 Inc. ($121 million), and Coinbase ($116 million) in terms of capital raised among bitcoin and blockchain firms, according to news and research site Coindesk. Funding in the sector appears to have slowed down recently. About $484 million was invested in the sector in 2015. So far this year, including Ripple’s latest, the total is about $341 million.
The race to turn blockchain-based networks, which originally powered trading of bitcoin, has intensified. In August, R3 CEV unveiled its offering, called Concord. It’s a platform that takes its cues from bitcoin, but makes significant changes to appeal to banking customers. R3 counts more than 60 banks globally as partners.
Ripple’s services have changed significantly since its founding in 2013, and like R3’s are aimed at appealing to banks. Even back then, Ripple’s platform resembled bitcoin’s, but differed in significant ways. The latest iteration of its platform move even further away from a decentralized, fully transparent open ledger, and that is something that was a key sticking point for banks, Mr. Larsen said.
“The banks don’t like showing their aggregate data to the world,” he said. What Ripple has developed is a system, which it calls interledger, that allows banks to transact with each other directly, without any public ledger that would record and transmit the data.
The immediate focus is on cross-border transfers, a process that is currently cumbersome and generally expensive, and what Ripple describes as high-volume, low-value transactions, in other words, generally smaller transactions like, for example, payments on Amazon and other online platforms, or rides in Uber cars.
Mr. Larsen said the firm currently has 10 of its clients using the product commercially, with another 30 working on integrating Ripple into their systems. He expects more of these banks to go live on the platform this year, and start marketing their new, Ripple-based products in 2017.
“I think the tipping point has been reached,” Mr. Larsen said.
Write to Paul Vigna at email@example.com