Putting a big bet on the future of Ripple’s native cryptocurrency, sharing economy startup Omni accepted a “majority” of a $25 million investment in XRP.
Hoping the coin’s price will increase over the long haul and allow the company to bypass traditional Series C and Series D investment rounds, Omni CEO Tom McLeod told CoinDesk:
“I’m looking at the long term benefits of having a potentially appreciating value on the balance sheet.”
A traditional venture capital firm, Highland Capital Partners — which led Omni’s $7 million series A in 2016 — was also part of the round, investing an undisclosed amount in U.S. dollars.
Announced Tuesday, the XRP investment feels ill-timed as the price of the coin has fallen almost 50 percent, according to CoinMarketCap, following most of the world’s cryptocurrencies in a day of red in the markets.
According to McLeod, some of the XRP investment, which was led by Ripple co-founder and executive chairman Chris Larsen and Ripple’s CTO Stefan Thomas, will go toward paying freelancers and employee bonuses.
While getting paid in XRP is up to the individual, already the TablePR public relations agent that represents Omni, Anna Roubos, has accepted XRP as a form of payment from the company, she told CoinDesk.
What’s notable is that this use of the coin is a departure from the use case XRP has largely been tailored for — creating liquidity for large financial institutions’ cross border payments.
Yet, McLeod positioned the cryptocurrency as a way to break away from the formal, traditional venture capital model and instead entice talent with an incentive that could have a longer tail such as increasing cryptocurrency prices.
XRP has been on a bull run for the past month, starting its ascent from 20 cents per coin in mid-December until it finally eclipsed $3.80 per coin on January 6.
While the round was formally closed sometime in December, McLeod declined to give an exact date.
In additional to the investment, Larsen will be joining Omni’s advisory board and Thomas will be joining the startup’s board of directors.
And with that, McLeod said, Omni, which provides a peer-to-peer marketplace for the rental of physical items, has plans to work with Ripple more in the future.
“There are partnerships and plans that will involve Ripple Inc. going forward that will utilize XRP in some fashion,” said McLeod, although the company has no plans to accept XRP for payment right now.
While no specific details were given, Ripple’s current products include xCurrent, a real-time bidirectional messaging platform which doesn’t rely on XRP; xRapid, which uses XRP to lower liquidity costs for payments in emerging markets; and xVia, an API that allows users to send international payments over the Ripple network.
Over the past couple years, Ripple has signed more than 100 financial institutions to its platform, one of the reasons many novice crypto enthusiasts saw XRP as a good (yet inexpensive) investment.
However, there was, at times, fierce debate online about the wisdom of such an investment decision, since most of those partners use xCurrent, which, again, does not involve XRP. Only Mexican payments provider Cuallix gets exposure to XRP through xRapid, although Moneygram recently announced it would be testing the use of XRP for internal processes.
Hello, This is a pilot program being tested on internal MoneyGram International processes and is not intended for consumer use.
Still, McLeod, despite his optimism about the price of XRP, said accepting the investment in the cryptocurrency was about more than just currency speculation.
“We’re super aligned with their vision for reconciling faster payments. This gives us an opportunity to level up our product.”
Disclosure: CoinDesk is a subsidiary of Digital Currency Group, which has an ownership stake in Ripple.
The leader in blockchain news, CoinDesk is an independent media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. Have breaking news or a story tip to send to our journalists? Contact us at email@example.com.
Hoping the coin’s price will […]