HR Start-up Rippling Secures $500 Million in Funding
March 28, 2023 – HR software start-up Rippling has raised $500 million in a new funding round initially intended to help customers make payroll in the aftermath of Silicon Valley Bank’s (SVB) collapse. The round, led by technology investor Greenoaks Capital, gave Rippling the same valuation of $11.25 billion it had clinched after its previous capital raise last year, the company said.
Rippling announced in a March 17 blog post that it received a $500 million series E funding round. Putting the round together took less than three days and took place after the SVB collapse, according to the post. It also noted that it has moved its banking operations to JPMorgan Chase.
Rippling CEO Parker Conrad in the post looked back at the day when SVB collapsed, saying he was woken up at 5:30 a.m. on Friday, March 10, by a telephone call saying some clients’ employees had seen their payments arrive. At 9 a.m., the news arrived that the FDIC had closed SVB and frozen its assets. “We understood the gravity of the situation: Over 50,000 employees were in Friday’s pay run,” said Mr. Conrad. “Although it was ‘Silicon Valley’ Bank that failed, the prospective victims here were not rich venture capitalists. They were everyday Americans from across the country, making an average of roughly $55,000 per year. Eighty percent worked outside of California, and 65 percent worked outside of tech.”
Rippling decided to extend nearly $130 million of its own capital to fund customers’ payments to employees, but the company had used SVB’s software infrastructure to issue billions of dollars in payments each month. Mr. Conrad wrote that Rippling did have accounts with JPMorgan Chase as a redundant payments infrastructure, and it began transitioning to that on Friday after the SVB difficulties. However, JPMorgan Chase’s deadline for same-day payments was 12:30 PM, leaving Rippling with three and a half hours to get things done.
“Immediately, 15 of the top engineers at Rippling set to work generating a payment file we could submit to JPMC by their cutoff,” said Mr. Conrad. “It’s hard to rush something this important: It has to be perfect. As the 12:30 deadline neared, our CFO even negotiated extra time with JPMorgan. In the end, the files were processed, and employees saw payments start arriving immediately. Most employees were paid on time on Friday, and the rest were paid first thing Monday morning. The company contacted Greenoaks Capital Partners LLC and was able to close the funding round in three days.”
Investment Funding
Investors are pouring money into recruiting solutions businesses, especially those with a psychology and data science component. Here’s a look at some other recent funding deals secured by these companies from the Hunt Scanlon Media archives:
Glider AI, a Cupertino, CA-based skill intelligence platform provider, raised $10 million in series A funding. The round was led by Primera Capital. The company intends to use the funds to continue its expansion in contingent programs and permanent hiring, furthering the development of proprietary technology, and growing its global team. Founded in 2020 by Satish Kumar, Glider AI provides hiring solutions, including screening, assessments, coding/video interviews, and upskilling software to scale hiring talent for the enterprise, staffing firms, and MSPs.
ShiftKey, a Dallas-based healthcare recruiting company, has closed on a funding round sponsored by majority investor Lorient Capital, valuing the company in excess of $2 billion. Crunchbase News reported the round was for $300 million. Lorient’s investment was completed through a continuation vehicle that was led by the Ares Management Secondaries funds and Pantheon. Additional investors participating along with Lorient, Ares, and Pantheon include Clearlake Capital and Health Velocity Capital.
Chicago-headquartered referral recruiting service Hunt Club has raised $40 million Series B round co-led by WestCap and Sator Grove. The investment round follows Hunt Club’s $10 million Series A financing in October 2021, and will fuel the company’s national expansion, technology platform enhancements, and broaden its community of over 20,000 business leaders who help connect the most innovative companies to the world’s top candidates. “We’re reimagining the entire talent process. Top talent leaders are not only hard to find, but they are hard to reach – and traditional recruiting firms aren’t equipped to innovate for their customers,” said Nick Cromydas, co-founder and CEO of Hunt Club. “Our technology is bridging that gap, introducing a personalized approach to helping companies change the way they approach talent acquisition. Hunt Club is proud to partner with WestCap, a premier growth equity firm led by a team that has founded, invested in, and operated tech-enabled marketplaces such as Airbnb for over 20 years.”
JobGet, a mobile app for hourly workers, has secured $52 million in Series B funding including $12 million in venture debt financing. JAZZ Venture Partners and Sanabil Investments co-led the round, with participation from Pillar VC and numerous other investors. “Our app is just the beginning,” said Tony Liu, co-founder and CEO. “We are building a new type of platform that enables deeper relationships between our talented hourly workers and hiring managers, with intelligent technology connecting both to better opportunities.” “We’re delighted to continue to support JobGet’s explosive growth,” said Zack Lynch, managing partner, JAZZ Venture Partners. “The company has deepened its executive bench with rich expertise that will turbocharge their efforts to transform the job seeking experience for hourly workers.”
SeekOut has announced a $115 million series C funding round led by Tiger Global Management. The round values the Seattle-based company – an artificial intelligence-powered talent search engine – at more than $1.2 billion. “The Great Resignation remains top of mind for both employees and employers as we enter 2022,” said Matthew Merker, research manager, talent acquisition and strategy at IDC. “The way employees look for work opportunities has fundamentally changed, and employers need to rethink how they find new talent and retain existing talent. SeekOut’s data-driven Talent 360 platform offers organizations an advanced set of capabilities that help ease this transition and redefine enterprise talent optimization moving forward.”
Hirewell, a Chicago-based talent acquisition firm, secured an investment of $21 million from Prytek, a global investment firm with expertise in integrating global services firms with cutting-edge technologies. Prytek will provide capital to enable Hirewell to accelerate its organic growth and integrate technology into its managed recruiting services. As part of this investment, Hirewell will acquire ICV, a Tel Aviv-based software company. “The talent acquisition space has evolved significantly over the past 10 years, but technology has yet to truly disrupt the industry,” said Matt Massucci, founder and CEO of Hirewell. “Recruiters increasingly rely on multiple platforms, most of which don’t integrate or have limited functionality, and some of which actually compete with the recruiters they claim to support. The ability to combine best-in-class recruiters with cutting-edge technology will equip us to be the ideal recruiting partner for companies that are serious about finding top talent. We are thrilled to partner with Prytek to take that step and continue delivering powerful results to our clients.”
Related: LCap Group Invests in Rowan Executive Search
Contributed by Scott A. Scanlon, Editor-in-Chief; Dale M. Zupsansky, Managing Editor; and Stephen Sawicki, Managing Editor – Hunt Scanlon Media
