HR tech startup Rippling hits $16.8B valuation after $450M funding round

HR tech startup Rippling is now valued at $16.8 billion after closing a $450 million funding round, the company confirmed Friday. It’s a jump from the $13.5 billion valuation it posted a year ago.

On top of the new funding, the San Francisco-based Rippling said it plans to spend another $200 million buying back shares from employees, both current and former. The round didn’t have a lead investor, but Baillie Gifford, Elad Gil, Goldman Sachs Growth, and others participated, the company said.

The funding news comes just two months after Rippling sued rival payroll startup Deel over trade-secret theft in a high-stakes corporate espionage case. Rippling alleged that one of its employees secretly shared internal company records with Deel executives and a reporter.

Rippling Raises $450M, Pushes Valuation to $16.8 Billion Amid IPO Slowdown

With the IPO window still mostly shut and recent trade tensions making things worse, high-growth tech firms are sticking with private capital for now. Rippling CEO Parker Conrad told CNBC the company isn’t gearing up for a public offering any time soon.

He pointed to changes in public market expectations over the past few years, especially after inflation spiked in late 2021 and interest rates followed. As investor priorities shifted, many startups cut costs and focused on staying cash-flow positive.

“To be successful in the public markets, your growth rates have to come down so that you can be profitable,” said Conrad, who has avoided layoffs. “And so for us, that sort of pushes things out until the company looks profitable and probably slower growing, right?”

Rippling says its revenue is growing at over 30% annually. Though the company didn’t share fresh numbers, it previously reported more than $350 million in recurring revenue at the end of 2023, up twofold from the year before.

Profit isn’t the immediate focus for Conrad, who says the company still has room to grow.

The startup offers a mix of payroll, device management, and corporate credit cards, going up against players like ADP, Paychex, Paycom, and Paylocity. It’s also competing with Deel, a private company that Rippling sued in March for allegedly planting a spy to steal confidential information.

Conrad thinks the high-profile legal fight may have worked in their favor. “We see some companies that have said, ‘Hey, we’re talking to Rippling because of this,’” he said.