Last week, it was revealed by TechCrunch that Rippling, a workforce management software company, was on the brink of securing a new $200 million funding round at a valuation of $13.4 billion led by Coatue. Additionally, a separate $670 million secondary component was included in the round, allowing investors and employees to cash out some of their shares.
In a recent interview, Rippling’s founder Parker Conrad confirmed the details, stating that the secondary component was a $590 million tender, with $200 million for employees and $390 million for seed and other investors. The Series F round was predominantly an inside round, with Coatue, Founders Fund, Greenoaks, and Dragoneer as key investors.
Apart from the funding news, Conrad also shared insights on other aspects of Rippling, such as the company’s new office lease and its minimal reliance on AI. A podcast featuring the full conversation will be released soon. Here are some edited excerpts from the interview:
Why raise this money?
Conrad explained that the initial goal was an employee tender for liquidity. However, due to high investor interest, they expanded to include primary capital and seed investors in the round.
What does the secondary sale signify for Rippling’s IPO plans?
While an IPO is on the horizon, Conrad emphasized the importance of relieving pressure on employees before going public to prevent massive sell-offs.
Is this the first time employees have sold shares?
No, Rippling conducted a smaller sale in 2021, but this latest one is significant due to the company’s growth.
How do you feel about employee turnover?
Conrad expressed sadness when early employees leave, highlighting the importance of maintaining a stable executive team at Rippling.
Regarding the new office space in San Francisco,
Conrad explained that in-office collaboration is valuable to Rippling, and the company was quick to return to office work after the pandemic. The new lease aims to support local employees and the company’s growth.
What sets Rippling apart in the crowded workforce management software market?
Rippling’s strategy focuses on offering a broad product suite with strong integration, emphasizing the importance of a comprehensive approach over narrow, specific products.
What is Rippling’s stance on AI?
Rippling currently has minimal AI products, with Conrad expressing skepticism towards trendy AI solutions like chatbots for HR software.
Regarding a tweet about Rippling’s new round from Bill Gurley,
Conrad assumed Gurley’s comment was critical due to their differing business approaches, emphasizing Rippling’s heavy investment in R&D as a strategic choice.
Has Bill Gurley worked with Rippling before?
No, Conrad has not met Gurley, but acknowledged his reputation as an antagonist in the business world.
Lastly, Conrad shares a common sentiment with Gurley regarding another industry figure,
Conrad humorously suggests meeting Gurley over their shared sentiments towards Marc Andreessen for a friendly discussion.
