‘Why Do You Want To Touch XRP?’: Flare Co-Founder Recalls VC Skepticism During Fundraising
Hugo Philion, co-founder of Flare Network, revealed on March 24 that venture capitalists questioned his team’s decision to integrate with XRP during early fundraising rounds. Speaking on a podcast, Philion recalled one investor asking bluntly, “Why do you want to touch XRP?”
The remark underscores the persistent skepticism that XRP has faced from institutional investors since the U.S. Securities and Exchange Commission filed its lawsuit against Ripple Labs in December 2020. Although a federal judge ruled in July 2023 that programmatic sales of XRP did not constitute securities transactions, the legal cloud has lingered in the minds of many traditional venture firms.
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Flare’s Early Fundraising Challenges
Flare Network, which describes itself as a blockchain for data connectivity, raised capital by pitching a vision of interoperability between XRP Ledger and smart contract platforms. Philion said that VCs were not only cautious about regulatory risk but also questioned the commercial viability of building on a token that many institutions had written off.
“They would ask, ‘Why not just build on Ethereum or a Layer 2? Why take the extra risk?'” Philion recounted. He explained that the Flare team had to spend significant time educating investors about XRP’s existing user base and cross-border payment use cases.
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The fundraising process, Philion noted, was slower and more difficult than it would have been for a project built on a less controversial blockchain. Flare eventually secured backing from several crypto-focused funds, but the experience highlighted a divide between specialized crypto VCs and traditional venture capital firms.
What This Means for XRP and Flare
The anecdote offers a rare behind-the-scenes look at how XRP’s regulatory uncertainty has affected real-world startups. Flare’s technology depends on the XRP Ledger for certain data feeds and oracle functions, making the token’s legal status a direct business concern.
For XRP holders, the story reinforces the idea that mainstream institutional adoption remains an uphill battle. Despite the partial legal victory in 2023, many VCs continue to treat XRP as a higher-risk asset compared to Bitcoin or Ethereum.
Flare’s mainnet launched in July 2022, and the network has since attracted developers building decentralized applications that use data from multiple blockchains. Philion said the company is now focused on expanding its ecosystem rather than fundraising.
