21-05-2025
Rippling and Deel fracas pulls in a third "unicorn"
The corporate espionage fight between Rippling and Deel again has escalated, and this time appears to involve a third HR software "unicorn."
Catch up quick: Rippling sued Deel in March, accusing Deel of hiring a spy inside of Rippling.
Deel, which is valued by VCs at around $12 billion, denied the allegation and countersued for defamation.
Rippling last week announced $450 million in new funding at a $16.8 billion valuation, and also said it would launch a $200 million tender offer for current and former employees.
Fast forward: The tender launched Monday, and related documentation included some information on the Deel conflict in its "Risk Factors" section.
It then dropped two bombshells.
The first was a claim that Rippling has reported Deel's alleged conduct to U.S. federal law enforcement, as NY Times was first to report, and that Rippling "understands" that there is "an active criminal investigation."
The second is an allegation that Globalization Partners "has also discovered and reported similar conduct to U.S. federal law enforcement and that an active criminal investigation into that conduct is ongoing."
Zoom in: Globalization Partners is a Boston-based employment software firm that in 2022 raised $200 million from Vista Credit Partners at a $4.2 billion valuation.
It hasn't addressed the Deel situation, nor has it sued civilly, but a source familiar with the company says that language in the Rippling tender is an accurate representation of its position.
What they're saying: "This is the latest example of Rippling trying to use the court of public opinion to drive its years-long smear campaign against Deel," a Deel spokesperson tells Axios.
"This media cycle is proof," she continues. "We are not aware of any active investigations into our business. As detailed in our lawsuit, Rippling has a long history of making false or sensationalized allegations to governmental authorities about competitors, which prompt 'inquiries' from the government that Rippling then leaks to the media."
The bottom line: Most customers are unlikely to care about a civil dispute between rivals, so long as the software works. But criminal proceedings would be a much different animal, particularly in a sector where compliance plays a major role.
