Ripple's prime brokerage arm has raised $200 million in funding from Neuberger Berman to increase margin opportunities for investors trading traditional and digital markets.
The company arranged the asset-based debt instrument through Neuberger's specialty finance group. Ripple can access up to $200 million depending on the borrowing needs of institutional investors when trading equities, fixed income and cryptocurrencies.
Ripple Prime President Noel Kimmel said the financing is a single lending structure covering major asset classes. The division uses blockchain technology and will use the funds raised to expand its ability to finance client transactions, known as margin availability. Margin loans function as collateral—similar to instruments backed by credit card debt or auto loans.
Prime brokers provide services including financing, securities lending and custodial services to help investors manage risk and execute trades. As a non-banking entity, Ripple offers prime brokerage services in traditional markets such as the foreign exchange market, as well as the digital asset market.
Last year, Ripple acquired prime broker Hidden Road for $1.25 billion, one of the largest transactions in the history of the cryptocurrency industry. The company also subsequently agreed to purchase treasury management software provider GTreasury for $1 billion.
Additionally, Ripple raised $500 million in November, reaching a valuation of $40 billion, backed by Fortress Investment Group and Citadel Securities. These funds were used to develop custodial services, stablecoin and prime brokerage of Ripple.