Rippling valued at $16.8 billion as HR software startup raises $450 million, says IPO not imminent

Human resources software startup Rippling said Friday that its valuation has swelled to $16.8 billion in its latest fundraising round.

The company raised $450 million in the round, and has committed to buying an additional $200 million worth of shares from current and previous employees. The company's valuation is up from $13.5 billion in a round a year ago.

Rippling said there was no lead investor. Baillie Gifford, Elad Gil, Goldman Sachs Growth and others participated in the round, according to a statement from the San Francisco-based company.

With the tech IPO market mostly dormant over the past three-plus years, and President Donald Trump's new tariffs on imports leading several companies to delay planned offerings, the most high-profile late-stage tech startups continue to tap private markets for growth capital. Rippling co-founder and CEO Parker Conrad told CNBC in an interview the the company isn't planning for an IPO in the near future.

Conrad also highlighted a change that's taken place in public markets in recent years, since inflation began soaring in late 2021, followed by higher interest rates. With concerns about the economy swirling, many tech companies downsized and took other steps toward generating and preserving cash.

"It does look a lot like, in order to be successful in the public markets, your growth rates have to come down so that you can be profitable," said Conrad, who avoided enacting layoffs. "And so for us, that sort of pushes things out until the company looks profitable and probably slower growing, right?"

At Rippling, annual revenue growth is well over 30%, Conrad said, though he didn't provide an updated sales figure. The information reported last year that Rippling doubled annual recurring revenue to over $350 million by the end of 2023 from a year prior.

Given the pace of expansion, Conrad said he isn't fixated on profits at the moment at Rippling, which ranked 14th on CNBC's Disruptor 50 list.

Rippling offers payroll services, device management and corporate credit cards, among other products. Competitors include ADP, Paychex, Paycom Software and Paylocity.

There's also privately held Deel, which Rippling sued in March for allegedly deploying a spy who collected confidential information. Conrad suggested that the publicity surrounding the case may be boosting business.

"I think it's too early to say, looking at the data, how all of this is going to evolve from a market perspective, but certainly we see some companies that have said, 'Hey, we're talking to Rippling because of this,'" Conrad said.

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