Why This Startup Took Part of Its Venture Funding in XRP

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.

Yet on Tuesday, the price of XRP hit a two-week low at $0.90.

While the round was formally closed sometime in December, McLeod declined to give an exact date.

Future use

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…

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