Rippling’s Series F Funding to Value Company at $13.4 Billion
HR tech startup Rippling is raising new capital in its upcoming funding round, which could value the company at as high as $13.4 billion on a post-money basis. According to sources familiar with the deal, Rippling will receive an injection of $200 million from the new round, while existing shareholders will sell shares worth $670 million.
Rippling’s Previous Funding Rounds
This funding round is part of Rippling’s Series F, which follows its previous funding rounds that had valued the company at $11.25 billion just a year ago. Prior to this round, Rippling had raised a total of $1.2 billion. The new valuation is expected to exceed the previous one due to the growing demand for HR tech solutions.
Rippling’s Last Round During Silicon Valley Bank Crisis
Rippling’s last funding round came together during the crisis with Silicon Valley Bank, when its funds were suddenly frozen. Founder and CEO Parker Conrad took to X (formerly Twitter) to work on raising cash needed to cover payrolls for employees. This experience may have contributed to Rippling’s aggressive expansion plans.
Existing Investor Founders Fund to Invest $310 Million
Notably, existing investor Napoleon Ta at Founders Fund is prepared to invest up to another $310 million in this round. This would be the largest check that Founders Fund has ever written for a single company’s round. However, it’s unclear how much of this investment will go towards buying new shares and how much will be used to purchase existing shares from other investors.
Coatue Leading the Round
It’s worth mentioning that Coatue is leading the round, with participation from existing investor Greenoaks. The fact that Coatue is taking the lead in this funding round highlights the growing confidence of investors in HR tech startups like Rippling.
The Growing Demand for HR Tech Solutions
The demand for HR tech solutions has been increasing rapidly in recent years, driven by the growth of remote work and the need for more efficient payroll services. Companies like Gusto and Deel have reached significant milestones, with trailing revenue reaching $500 million last year and annual recurring revenue hitting the same mark.
Competitors in the Market
Rippling’s competitors, such as Gusto, Deel, and Remot, are also raising significant amounts of capital. With valuations reaching over $9 billion for some companies, there is a massive amount of venture capital invested in HR tech startups today. New companies like Remofirst are emerging to compete with established players.
Aggressive Expansion Plans
Rippling is aggressively expanding its operations, having recently signed a 123,000-square-foot lease for a new San Francisco headquarters. This move quadruples the company’s office space and makes it one of the largest leases in the city this year.
Liquidity for Shareholders
The IPO market remains sluggish, leading existing shareholders to seek liquidity by selling stakes in private companies. Large secondary transactions have become increasingly popular as a result. Rippling’s funding round is likely part of this trend.
Conclusion
Rippling’s Series F funding round has the potential to value the company at $13.4 billion on a post-money basis, making it one of the most valuable HR tech startups in the industry. With its aggressive expansion plans and growing demand for HR tech solutions, Rippling is poised for continued growth in the coming years.
