Chris Larsen is not only an early investor and co-founder of Ripple Labs Inc, the payment network behind the XRP cryptocurrency, he is also a business executive and angel investor, known for co-founding several Silicon Valley tech startups. In this article we will discover in detail who Chris Larsen is and why he is so important to blockchain technology and cryptocurrencies.
Chris Larsen was born in San Francisco in 1960, received a B.S. in International Business and Accounting in 1984 from San Francisco State University and an MBA from Stanford Business School in 1991.
In 1996, he co-founded the online mortgage lender E-Loan, which became the first company to provide consumers’ FICO credit scores for free. But the project that stood out most in his professional career was the creation of Ripple Labs, Inc. which developed Ripple, software that enables the instant and direct transfer of money between two parties.
In the early 1990s, Larsen began working for a mortgage lender in California until, in 1996, he decided to shift his focus from mortgage business to developing E-Loan, a mortgage lending website that he used as a way to avoid broker commissions and other fees.
E-Loan’s website, launched publicly in 1997, allowed borrowers to search for and purchase loans directly online, without the fees charged by brokers and sales agents.
E-Loan was very successful and became one of the first online mortgage lenders in the United States until, in 1998, the company began to struggle to fund its operations and Larsen stepped down as president.
In 1998 Larsen and his partner Pawlowski closed a deal with Yahoo CEO Timothy Koogle, who wanted to buy a 23% stake in E-Loan’s outstanding shares for $25 million. Larsen and Pawlowski were able to retain control of E-Loan.
E-Loan became the first company in the United States to provide consumers’ FICO credit scores free of charge.
In 2000, E-Loan’s market value was estimated at US$1 billion. Larsen left the company in 2005, when it was sold to Banco Popular.
In the early 2000s, Larsen began his financial privacy activism in California and played an important role in the passage of California’s privacy law in 2003 thanks to the “Californians for Privacy Now” coalition, of which he was a founder, which was able to gather 600,000 signatures to pass the bill to protect the privacy of customers of financial institutions.
In early 2005 Larsen resigned as CEO of E-Loan to start his other project “Prosper Marketplace” as CEO.
The company acted as an online auction marketplace in which lenders and borrowers determined loan rates using a system similar to Dutch auctions. By the end of 2008, Prosper had facilitated $271 million in peer-to-peer lending and received a total of $74.5 million in investment funds.
In 2008, Fast Company named Prosper to its Fast 50 list of the “most innovative companies of the year”.
In September 2012, Larsen co-founded OpenCoin, which was the company that began developing the payment protocol called Ripple that allowed instant and direct peer-to-peer money transfer.
OpenCoin also created its own cryptocurrency with the goal of allowing financial institutions to transfer money with minimal fees and waiting time.
On May 14, 2013, OpenCoin announced that it had closed a second round of funding and its first investors included Andreessen Horowitz, Google Ventures and IDG Capital Partners.
In September 2013, OpenCoin changed its name to Ripple Labs, Inc. and that was when the source code behind the Ripple payment network became open source. Larsen remained CEO of the company.
In 2014, Ripple was the second largest cryptocurrency by market capitalization, after Bitcoin. Ripple Labs was named one of the 50 Smartest Companies by MIT Technology Review and fourth on a Fast Company list of the 10 most innovative financial companies in the world in 2015.
In an interview with Nielsen, Larsen stated, “We don’t see a need for the world to have a new currency; we see a need for a better way to move existing currencies . Market makers will find it very efficient to use a digital asset or cryptocurrency as part of their trading, but only if this cryptocurrency allows all things of value to be exchanged. Bitcoin does not allow that. That’s why we created Ripple, we mainly trade dollars, euros, yen, etc. We see Ripple (XRP) becoming the universal bridge for all things of value, and market makers will use it to create markets.”
In February 2018, Chris Larsen became the fifth richest person in the world on Forbes magazine’s list of billionaires.
His fortune totaled about $59 billion on Jan. 4, 2018, according to The New York Times, which briefly put him ahead of Mark Zuckerberg. But this position was short-lived for him because much of Larsen’s wealth is virtual.
Finally, in 2020, he ranked 319th on the Forbes 400 list of the richest people in the United States.