XRP-focused healthcare startup wanted $2.5M to grow. Four weeks later, it shut down

XRP Healthcare, an XRP Ledger-focused healthcare and crypto startup, was raising $2.5 million to expand its user base, token listings and AI products just four weeks before saying its normal operations had become financially unsustainable.

• The company said Thursday that it had begun an "operational wind-down" after nearly three years in business.
• It cited the prolonged crypto bear market, development and infrastructure spending, an unsuccessful effort to go public and additional pressure from a Sept. 3 incident involving its XRPH Wallet.
• The shutdown marks a sharp U-turn from the growth plans founder and CEO Kain Roomes laid out on Aug. 13.

$2.5 million was supposed to fund growth

At the time, Roomes pointed out in an interview with software review site zPlatform that XRP Healthcare was "currently raising $2.5M in growth capital."

• The largest share, 26%, was earmarked for marketing and user acquisition.
• Another 24% was intended for expanding its crypto operations and securing more exchange listings.
• Healthcare partnerships were allocated 20%.
• The remaining funds were split between audits, compliance and governance at 12%, working capital and reserves at 10% and AI products at 8%.

Roomes also said the company wanted to grow toward more than 1 million monthly active users and eventually generate revenue through $10-per-month subscriptions, healthcare partnerships and AI licensing.

• XRP Healthcare is an unusually broad business even by crypto standards.
• Founded in 2022, it has combined an AI-powered health app and prescription discount service with XRP Ledger-based tokens and a crypto wallet, while a related corporate entity has acquired healthcare businesses in Africa.
• Roomes added in the interview that its apps had reached more than 77,000 cumulative users across 217 countries and territories.

A failed listing, then a wallet drain

The $2.5 million raise wasn't XRP Healthcare's first attempt to secure new capital.

XRP Healthcare M&A Holding Inc., the part of the group focused on healthcare acquisitions, had previously agreed to combine with Canadian capital pool company AAJ Capital 3 Corp. in a deal intended to take the business public on the TSX Venture Exchange.

The proposed transaction placed a roughly C$15 million pre-money valuation on XRP Healthcare and initially contemplated at least C$1.3 million of concurrent financing.

• But that deal never closed. AAJ said on Feb. 9 that the definitive agreement had been mutually terminated.

XRP Healthcare said on Thursday that it had incurred "significant costs" over the previous two years pursuing the unsuccessful listing.

Much of the stolen value was ultimately converted into roughly 445,198 DAI on Ethereum. Investigators have since pointed to serious weaknesses in the wallet application itself rather than a compromise of the underlying XRP Ledger.

XRP Healthcare said the incident added further financial and operational pressure to an already costly business.

The company is now coordinating the delisting of XRPH and XRPHAI with exchanges and says its wallet applications will remain offline.

• Bitrue, one of the exchanges carrying XRPH, has already closed deposits and trading and told users they have until Dec. 10 to withdraw the token.
• Amid the news, the price of XRPH crashed by more than 50% on the day to $0.001, per data from CoinGecko.

XRP Healthcare said it will continue efforts to recover funds connected to the wallet incident and cooperate with exchanges and authorities. Its intellectual property and global trademark portfolio will also be retained separately.