Founder interview: Chris Larsen, CEO, Ripple

We recently had the opportunity to meet with Chris Larsen, founder and CEO at Ripple. Santander Innoventures has invested in Ripple. Larsen’s track record of success with E-Loan and then Prosper, gives him a unique perspective on the evolution of fintech.

Raising a funding round

Chris Larsen’s first business, E-Loan, was a child of the dotcom era. As a first generation internet entrepreneur Larsen brings an informed view to the buzz that surrounds financial technology today. E-Loan was soon followed by peer-to-peer lender Prosper.

During the lifespan of these businesses he has also raised numerous rounds of venture capital. “With that first business we were very focused upon simply raising cash. Now I better understand the value of partnership. Strategic investors – those with more than a simple financial contribution to make – can really add value to a startup, accelerating growth and quickly multiplying the value of the business.”

In a word of advice for fellow startups and entrepreneurs, Larsen emphasizes, “Don’t underestimate how closely you will be working with your venture capital partners. Remember, you are going to be sitting alongside these people for the next five years. Personal chemistry and a shared vision are the factors that should hold you together, not simply financial obligation.”

In Ripple’s most recent funding round, Santander Innoventures invested in the business.

“It was fantastic to have Santander participating,” says Larsen. “They have a great reputation for innovating to serve their customers, a vision that clearly comes from the very top of the business, and is passed right down into the Group’s many businesses around the world.”

Transformational change

The conversation between Ripple and Santander started at a time when many banks were sceptical, if not indifferent, toward distributed ledger technology. Many misconceptions surrounded the topic. Santander however proved more open to innovation.

“We quickly found many common reference points,” says Larsen. “We shared a desire to dig down deep into the operations and processes of the financial markets to find ways of removing friction that has been built into processes over many years. Like us they have an appetite to effect change, not just talk about it.”

The arrival of the internet didn’t fundamentally change finance like it did in other industries, music and retail being the most obvious examples. However Larsen believes distributed ledger technologies will cause that type of transformational shift: “That’s why we want to work with banks – like Santander – that really understand the implications and see the potential.”

Banks have an essential role to play in creating what Larsen describes as an Internet of Value, acting as custodians of value for their customers, in the same way that they have protected their customers’ physical assets for centuries. “Being able to discuss, test and evolve these sorts of ideas with a global bank such as Santander has helped us refine our approach to the market,” says Larsen.

While details of the funding round were being wrapped up, Santander’s innovation team were already beginning to experiment with business applications and use cases for the technology. Similarly, introductions were made into the group’s local banks and their technology teams to help advance Ripple’s prospects for international growth.

Our conversation with Chris continues in another post, watch for links.