Cryptocurrency firm Ripple Labs could go public this year. The company’s chief executive Brad Garlinhgouse stoked the fires earlier this week.
Garlinghouse made an appearance at the World Economic Forum earlier this week, and according to a tweet from Asheesh Birla, the Senior Vice President of Product at the San Francisco firm, there are prospects of Ripple filing for an Initial Public Offering (IPO) later this year.
The tweet, which was posted earlier today, revealed that Garlinghouse said, “In the next 12 months, you’ll see IPOs in the crypto/blockchain space. We’re not going to be the first, and we’re not going to be the last, but I expect us to be on the leading side… it’s a natural evolution for our company.”
Time to Move from the ICO to the IPO Model
In an IPO, a company finally offers its shares to the public in a new stock issuance. An IPO is one of the most popular funding forms, as companies prefer to do this after they’ve built their business to a point where private venture capital might not be sufficient to keep their operations functional. Of course, there’s also the publicity and acclaim that comes from being listed on a public stock exchange.
While hundreds of firms go public in the United States alone, cryptocurrency firms haven’t been overly successful in this regard. For one, most crypto firms prefer to generate their funds through Initial Coin Offerings (ICOs), which evolved with the crypto space as an alternative means of raising funds for young firms.
Still, as the crypto space has continued to grow, it has become more of a necessity to move to the traditional IPO space and provide members of the public with access to these companies’ shares. Sadly, not many cryptocurrency firms have been able to do this successfully.
Ripple Could Be the First Successful Crypto IPO
All through last year, the only notable crypto company that went public was Canaan Creative, a manufacturer of bitcoin mining equipment based out of China.
Canaan had been nurturing the idea of going public for the better part of last year, as the company saw its sales and revenues bolstered by the surge of the cryptocurrency market and an increase in both Bitcoin mining profitability and network activity. However, things began to go south after the firm lost its banking partner- Zurich-based banking giant Credit Suisse- just days before it was meant to conduct the IPO.
Eventually, Canaan had to reduce its IPO valuation expectations from $400 million to $100 million. Even at that, it struggled to head to the IPO in November, and only managed to raise $90 million of that amount.
While Canaan was eventually able to go public, several other crypto firms have been linked to IPOs, but haven’t been able to get themselves past the goal line. The most popular, of course, is Bitmain- the largest Bitcoin mining rig manufacturer and Canaan’s largest competitor.
However, if any crypto firm can go public, Ripple definitely has what it takes. The firm had a strong 2019, making strategic investments and partnerships, and achieving a $10 billion valuation. Its leadership is also structured right, and unlike the two companies mentioned earlier, it has the luxury of being an American firm.