Ripple, the company that leverages the XRP ($2.27) cryptocurrency, is raising capital for the first time in six years.

On Wednesday, the firm announced a $500 million strategic investment from affiliates of Fortress Investment Group, affiliates of Citadel Securities, Pantera Capital, Galaxy Digital, Brevan Howard, and Marshall Wace.

The decision to sell another $500 million in new common equity “reflects the strategic value of deepening relationships with financial partners,” Ripple said in a post announcing the raise.

The raise values Ripple at $40 billion — a more than 263% increase from the firm’s previous valuation event. In January 2024, Ripple bought back $285 million worth of shares from early investors and employees at an $11.3 billion valuation, according to Reuters.

It follows Ripple’s recent $1 billion tender offer at the same valuation.

It’s the biggest funding round since Ripple’s Series C, which closed in December 2019 and raised $200 million at a $10 billion valuation. That round was led by Tetragon and included investments from SBI Holdings and Route 66 Ventures.

Upping the ante

The raise comes amid a Wall Street crypto land grab following the passing of landmark stablecoin regulation in the US.

In September, Reuters reported that a Wall Street consortium including Apollo Global Management, Oppenheimer, Jane Street and HSG invested $500 million in crypto exchange Kraken at a $15 billion valuation.

In June, USDC ($1.00) stablecoin issuer Circle conducted an initial public offering that valued the firm at $6.9 billion. Investors piling into Circle’s stock have pushed that valuation up to more than $28 billion.

Ripple’s soaring valuation ups the ante for other crypto firms courting Wall Street for investment.

Ripple diversifies

Launched in 2012, Ripple styles itself as a fintech firm that leverages the XRP Ledger blockchain to provide cross-border payments, among other services.

In recent months, the firm has started diversifying its business by entering new markets in prime brokerage and treasury management.

Last month, Ripple bought GTreasury, a firm that offers corporate treasury management services, for $1 billion.

In April, Ripple spent $1.25 billion on Hidden Road, a non-bank prime broker that offers institutions clearing, prime brokerage, and financing across foreign exchange, digital assets, derivatives, swaps, and fixed income.

The acquisitions come as more and more firms look to muscle in on crypto-based cross border transfers.

Heavy hitters including Tether sister company Bitfinex, payments giant Stripe, and Circle are building new blockchains specifically for payments using US dollar stablecoins.

At the same time, existing cross border payment providers are cosying up to crypto.

Last month, Western Union, one of the largest and most well-known money transmitters, announced plans to deploy a stablecoin on the Solana blockchain.

Tim Craig is DL News’ Edinburgh-based DeFi correspondent. Reach out to him with tips at tim@dlnews.com.