German VC Invests in Ripple in Anticipation of Its IPO
tokentus sees promise in the XRP Ledger as a smart contract platform.
Per a press release yesterday, German venture capitalist tokentus investment AG has invested in US blockchain payments firm Ripple.
According to the company’s statement, it made a $100,000 investment in Ripple via a Special Purpose Vehicle (SPV), a legal entity created to allow investors under a certain threshold to pool funds together into a single entity.
Notably, it is not initially a direct investment. However, tokentus CEO Oliver Michel reveals that when Ripple goes public via an Initial Public Offering (IPO), the SPV will be dissolved, and its Ripple shares will be transferred to tokentus. The tokentus chief asserted that the firm’s investment would put it in a good position in anticipation of Ripple’s IPO.
“In our opinion, Ripple is among the most established and significant companies in the blockchain space,” Michel said. “According to the company, an IPO is planned in perspective, in which we naturally want to be an investor. As part of its IPO, the SPV would be dissolved and its shares of Ripple would be registered and directly transferred to tokentus. This puts us in a good position.”
Meanwhile, Benedikt Schulz, the company’s investment manager, let slip that the firm saw promise in the XRPL as a smart contract platform.
“We see great future potential for Ripple, especially if so-called smart contracts, i.e. digital contracts based on the blockchain, continue to gain acceptance in Ripple technology, which we are convinced of,” Schulz said.
It is worth noting that tokentus is a German VC focused on the blockchain industry. It has also invested $50,000 in Polysign, an institutional digital asset custody provider with strong ties to Ripple. The firm previously invested $1.35 million in now-bankrupt crypto lender Celsius.
Ripple Shares Are In High Demand
It bears mentioning that Ripple shares are in high demand, as indicated in previous reports, as the company is a top seller on Linqto, a private investment platform. Notably, the last block of Ripple shares on the platform sold out in less than 24 hours, as predicted by the company’s director of member investments, Nick Burrafato.
Having run out of Ripple for the past 12+ hours, we’re excited to announce that we’ve secured a limited block of shares—similar in size to the previous block that sold out in under 24 hours. 1/2 pic.twitter.com/ws3mkqBQDJ
— Linqto (@linqtoinc) January 13, 2023
As highlighted in the previous report, investments in private companies like Ripple are limited to accredited investors in the US. This is because private shares are significantly less liquid than public shares. Consequently, holding private shares carries a higher risk. However, as is usually the case with finance, they also offer a corresponding high reward potential, as investors can sell at significantly higher prices when the company goes public.
In a blog post, finance author Linda P. Jones explains how one can become an accredited investor.