This article originally ran in Term Sheet, Fortune’s newsletter about deals and dealmakers. Sign up here.
Ripple, the fintech startup known for the XRP coin, made a $25 million investment in the form of its own cryptocurrency into a dedicated sidecar vehicle alongside Blockchain Capital’s fourth venture fund.
Blockchain Capital, the oldest venture capital firm dedicated to blockchain technology, announced last month that it raised $150 million to invest in equity and cryptocurrency assets.
Now, Blockchain Capital says it accepted XRP, reportedly making it one of the first venture firms to accept capital calls in digital assets. The fundraise carved out the XRP funds into a separate special purpose vehicle called Blockchain Capital Parallel IV, which only accepts contributions in cryptocurrencies.
“We created the parallel fund to separate our other LPs from the risk of any change in valuation associated with accepting Ripple’s investment in XRP,” said a spokesperson for Blockchain Capital.
XRP, the third-largest cryptocurrency by market cap after Bitcoin and Ethereum, is the name for both a digital currency and an open payment network. Users are able to efficiently send money globally using the blockchain. Blockchain Capital is looking to deploy the XRP into companies focused on healthcare or identity management, which are industries that “could benefit from blockchain or distributed ledger technology.” Blockchain Capital is also an investor in Ripple, the company.
“Whether it’s using XRP, bitcoin, or just the underlying blockchain technology, our goal is to find the best projects and give them the resources to be successful companies that deliver value to customers for the long-term,” said Blockchain Capital managing partner Bart Stephens.
If you’re scratching your head as to why a company would choose to accept capital in the form of a cryptocurrency, let’s remember what happened with storage startup Omni.
In December, Omni raised $25 million in Series B funding, opting to accept the majority of the investment in XRP. On the same day that the startup announced the fundraise, XRP plunged 46% to near 90 cents, meaning that the principal investment amount no longer held the same value. At the time, Omni CEO Tom McLeod said he wasn’t worried about the short-term price volatility. Rather, he’s betting on the long-term benefits of “having a potentially appreciating value on the balance sheet.”
I followed up with him yesterday to see how he has navigated Ripple’s price fluctuations over the last few months, and he noted that he hedged against some of the volatility by converting a portion of the investment to USD.
“We fully expect to see (and have seen) a lot of movement – up and down – in the coming months,” McLeod told Term Sheet. He added that XRP is “a highly usable currency” and some of his company’s vendors and employees have requested payment in the form of XRP.
So to founders working on cryptocurrency-related projects, it makes sense. For the rest of the venture community, investors need to ask themselves questions like, “Will future fundings be a mix of traditional VC and digital currency,” and “What safeguards will need to exist to prevent overexposure to cryptocurrency price volatility?”
As for Ripple, keep an eye out for more deals like this one. Patrick Griffin, Ripple’s SVP of Strategic Growth said, “This is the first fund that we’ve contributed to, and it won’t be the last.”
文章最初刊登在术语表，幸运的简讯的交易和交易撮合者。在这里注册。脉动，FinTech启动称为XRP硬币，在它自己的cryptocurrency形式投资2500万美元给一个专门的三轮车辆在blockchain首都第四创业基金。blockchain首都最古老的风险投资公司致力于blockchain技术，上个月宣布，筹集了1亿5000万美元投资于股票和cryptocurrency资产。现在，blockchain资本表示，接受XRP，据报道它在数字资产的资本要求接受第一次创业的公司之一。该筹款雕刻出XRP资金到一个单独的专用车叫blockchain资本平行四，只接受捐款的cryptocurrencies。“我们创建了平行基金分开我们的其他LPS从估值与接受在XRP纹波的投资相关的任何变化的风险，”一位发言人说blockchain资本。XRP、市值比特币和伊斯利恩之后的第三大cryptocurrency，为数字货币和一个开放的支付网络的名称。用户能够有效地在全球范围内使用blockchain寄钱。blockchain资本寻找部署XRP公司专注于医疗保健或身份管理，这是行业“可以从blockchain或分布式分类技术效益。“blockchain资本还投资了Ripple公司。“无论是使用XRP，比特币，或只是潜在的blockchain技术，我们的目标是找到最好的项目和给他们的资源是成功的公司，提供客户价值，为长期，说：”blockchain Capital管理合伙人Bart Stephens。如果你刮你的头是为什么公司会选择在一个cryptocurrency的形式接受的资本，让我们记住和存储启动全方位发生了什么。十二月，全方位提高了2500万美元的B系列融资，选择接受的投资大部分在XRP。在同一天，公司宣布筹款，XRP暴跌46%至近90美分，这意味着主要的投资金额不再持有相同的价值。当时，OMNI首席执行官Tom McLeod表示，他并不担心短期价格波动。相反，他认为长期效益的“具有潜在审美价值的平衡sheet.”我跟他昨天看到他如何导航波动的价格波动在过去的几个月里，他指出他对冲一些波动转换投资的一部分，美元。“我们完全希望看到（并看到）许多运动-上下-在未来几个月内，”麦克劳德告诉术语表。他补充说，“一个高度可用XRP货币”和他的一些公司的供应商和员工的要求支付在XRP形式。因此，创业者工作的cryptocurrency相关项目，它是有意义的。对风险社会的其余部分，投资者需要问自己这样的问题，“未来的竞争将是一个混合的传统VC和数字货币，”和“什么保障需要的存在可以防止过度cryptocurrency价格波动？至于Ripple，要留意更多像这样的交易。Patrick Griffin，纹波的SVP战略增长说，“这是我们促成了第一个基金，也不会是最后一次。”
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