Human resources software company Rippling announced a significant funding milestone, reaching a valuation of $16.8 billion in its latest fundraising round. The San Francisco-based startup raised $450 million in new capital, with an added commitment to repurchase $200 million in shares from existing and former employees. This latest valuation marks a notable increase from the $13.5 billion the company was valued at just a year ago.
There was no lead investor in the round, which saw participation from several prominent firms, including Baillie Gifford, Elad Gil, and Goldman Sachs Growth. Rippling’s decision to stay in private markets aligns with a broader trend, as many late-stage tech startups continue to seek private investment amid a sluggish tech IPO landscape. Current geopolitical and economic factors, including new tariffs, have added to the delay of several initial public offerings.
Co-founder and CEO Parker Conrad stated that Rippling is not targeting a public listing anytime soon. He pointed out the evolving conditions of public markets, particularly since the onset of inflation in late 2021 and the subsequent rise in interest rates. These changes have led many tech firms to scale back operations and prioritize profitability. Conrad emphasized that public market success now often requires slower growth in exchange for profit, which doesn’t align with Rippling’s current trajectory.
Despite broader economic uncertainty, Rippling continues to grow at an impressive rate, with annual revenue growth exceeding 30%, according to Conrad. While specific revenue numbers were not disclosed, prior reports indicated that the company more than doubled its annual recurring revenue to over $350 million by the end of 2023.
Conrad reaffirmed that profitability is not the company’s immediate focus, given its current stage of expansion. Rippling provides a suite of services including payroll management, device administration, and corporate credit cards. It competes with established names like ADP, Paychex, Paycom Software, and Paylocity, as well as with privately held Deel.
Rippling also recently made headlines after filing a lawsuit against Deel for allegedly hiring a spy to obtain confidential information. While the legal battle is ongoing, Conrad noted that the publicity may have brought new clients to Rippling, with some companies explicitly referencing the case during discussions.
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