Late-stage HR tech startup Rippling is raising a new round of funding that could total $870 million, with $670 million worth of shares being sold by existing stockholders. This would be Rippling’s Series F, potentially increasing its valuation to as high as $13.4 billion. The company’s previous funds were frozen during the Silicon Valley Bank crisis, prompting the founder and CEO to raise the necessary cash. Notably, existing investor Napoleon Ta at Founders Fund is prepared to invest up to another $310 million in this round, making it the largest check the fund has ever written. The HR tech market for payroll services and remote labor management is flourishing, with several well-funded late-stage startups.
Key Takeaways
- Late-stage startup Rippling is in the process of raising a Series F round of funding, potentially totaling $870 million, with $670 million in existing stockholder shares.
- This round could increase Rippling's valuation to $13.4 billion from $11.25 billion just a year ago, demonstrating rapid growth and investor confidence in the HR tech market.
- Notably, Founders Fund is prepared to invest up to $310 million in this round, a record-breaking amount for the venture capital firm.
- The HR tech market is highly competitive and well-funded, with several companies, including Rippling, Gusto, Deel, Remote, and Remofirst, vying for a significant share of venture capital and market dominance.
- Amid a sluggish IPO market, there is a trend of existing shareholders looking to sell stakes in private companies, leading to a surge in large secondary transactions.
Analysis
Late-stage HR tech startup Rippling's fundraising activity reflects investor confidence in the flourishing HR tech market. The freeze of Rippling's previous funds during the Silicon Valley Bank crisis led to the urgent need for cash. This new funding round, potentially totaling $870 million, could increase Rippling's valuation to $13.4 billion, demonstrating rapid growth. Existing stockholders selling $670 million worth of shares and Founders Fund's record-breaking $310 million investment indicate significant financial impacts on stakeholders. The competitive HR tech market, with companies like Gusto and Deel, is driving large secondary transactions amid a sluggish IPO market, shaping long-term industry dynamics.
Did You Know?
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Series F Round of Funding: This refers to the stage of funding that a startup secures from investors. Each round represents a different phase of the company's growth and typically involves a significant amount of capital. The Series F round for Rippling indicates that it is well-established and seeking substantial funding to further expand its operations.
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Valuation Increase: The valuation of a company represents its estimated worth, often based on its assets, revenue, and potential for future growth. The significant increase in Rippling's valuation from $11.25 billion to a potential $13.4 billion within a year highlights the rapid growth and investor confidence in the HR tech market, making it an attractive prospect for potential investors.
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Secondary Transactions: In a sluggish IPO market, existing shareholders of private companies, like Rippling, are looking to sell stakes through secondary transactions. This trend has led to a surge in large secondary transactions, where shareholders sell their shares to other investors, providing an opportunity for early investors and employees to realize gains without waiting for the company to go public.