Unpacking Rippling vs Deel: corporate espionage and a $16B plot twist

Despite courtroom chaos, Rippling is still going full steam ahead. The HR tech startup at the center of an increasingly dramatic legal battle with rival Deel just raised a fresh $450 million in funding at a $16.8 billion valuation, and launched a new “Startup Stack” to woo early-stage companies—winning over Y Combinator as both an investor and a client. The funding lands amid the company’s high-profile legal fight with Deel, which Rippling accuses of movie-worthy corporate espionage, complete with secret crypto payments and decoy Slack channels. Deel has denied the claims and fired back with its own lawsuit, calling Rippling’s accusations a “distraction.” Today on Equity, Mary Ann Azevedo and Charles Rollet are digging into the HR tech showdown from legal drama to IPO implications and global intrigue. Listen to the full episode to hear more about: The alleged spy, Rippling’s evidence, and Deel’s denials YC’s involvement in Rippling’s latest project, and why the move is raising eyebrows The potential impact on IPOs for both companies Equity is TechCrunch’s flagship podcast, produced by Theresa Loconsolo, and posts every Wednesday and Friday. Subscribe to us on Apple Podcasts, Overcast, Spotify and all the casts. You also can follow Equity on X and Threads, at @EquityPod. For the full episode transcript, for those who prefer reading over listening, check out our full archive of episodes here. Credits: Equity is produced by Theresa Loconsolo with editing by Kell. We’d also like to thank TechCrunch’s audience development team. Thank you so much for listening, and we'll talk to you next time. Learn more about your ad choices. Visit megaphone.fm/adchoices

Speaker names marked ? are inferred from speaking time and the show’s known hosts — they are not voice-verified.

• 0:00Anthony Ha?

  This episode of Equity is brought to you by Schneider Electric. Schneider Electric, advancing energy tech.

• 0:17Speaker 01

  Hello and welcome back to Equity TechCrunch's flagship podcast about the business of startups. I'm Mary Ann and this is the episode where we bring on industry experts to help us explore a trend in the tech world and dive deep. Today, I'm joined by fellow TechCrunch senior reporter, Charles Relais, to dig into the Deal versus Rippling drama that we have been covering over the past few months. There's a lot to unpack here, so stay with us. Charles, welcome to the show.

• 0:44Speaker 02

  Thanks a lot for having me, Mary Ann. Appreciate it.

• 0:46Speaker 01

  Of course, yeah. So I think there's been a few of us working on these stories over the past couple of months, probably arguably you more than anyone. But I'm going to give a quick backgrounder for our audience. First of all, Deal and Rippling both are what you kind of describe as HR tech and payroll companies, both very large with valuations over $10 billion. They've been competitors for years, kind of mudslinging on social media for a while now. But things really, really escalated a couple of months ago when Rippling announced a lawsuit, this was in March, against Deal as part of a 50-page complaint alleging racketeering, misappropriation of trade secrets, interference, unfair competition, aiding and abetting, a breach of fiduciary duty.

• 1:30Speaker 01

  Basically, Rippling accused Deal of hiring one of Rippling's employees to spy on the company. So that happened in March. Deal vehemently denied that it did anything wrong legally. And then itself filed its own counter suit against Rippling in late April. In between, there's been a ton of things going on. Charles, do you want to kind of fill in some of those gaps?

• 1:57Speaker 02

  I mean, there's so much to cover. It's a saga, basically. The big focus of the news was on this alleged spy. Like what Rippling claims was Deal bribing one of its staff to leak secrets, trade secrets to Deal. People focused a lot on that, understandably, because this alleged spy released a affidavit, and this was part of Rippling's case. This alleged spy confessed to being paid by Deal, sending Deal a bunch of information about Rippling. And I think what made it notable was the focus on evidence. I mean, Rippling included a ton of evidence, like screenshots of chats, screenshots of receipts. It seemed like Rippling, at least as far as this went, had quite a good case.

• 2:41Speaker 02

  However, Deal has denied everything. And what's happened since this whole affidavit has been quite interesting. And so that's when I started covering this case. I didn't really cover the affidavit as much. I read it like every other journalist, because it was really entertaining and interesting and...

• 2:58Speaker 01

  Like a movie?

• 2:59Speaker 02

  Like a movie.

• 3:00Speaker 01

  It's like a movie, yes.

• 3:01Speaker 02

  Exactly. Like you wrote a really good headline about it. There was a while where Deal was not being very public. They had denied the allegations, but basically where I picked it off was Irish business media were reporting that Rippling couldn't find Deal's CEO to serve him and other top executives of Deal to serve them. So I kind of wrote a quick piece about how Rippling's bailiffs can't find Deal's CEO. That actually attracted a lot of attention. And based on that, I was able to report that, at the time at least, Deal's CEO was in Dubai, which is kind of unique because Deal's CEO, he's known to travel a lot, but mostly he's known for being in France, he is French, and also Israel. He has a lot of family in Israel, or in New York, or Dubai was not really on the radar for him.

• 3:45Speaker 02

  And so it raised concerns from some people about like, oh, man, is he trying to evade being served?

• 3:52Speaker 01

  Right, because in Dubai, right, you can, what is the rule there? Like, you can't be extradited if you're in Dubai or something like that?

• 3:59Speaker 02

  Yeah. It's complicated, but Dubai is kind of considered a safe haven for people who are like avoiding legal issues or extradition or things like that, definitely, yes.

• 4:09Speaker 01

  Yes, now, it has that reputation. So this raised eyebrows, right? Everybody's like, oh, okay, well, if he doesn't have anything to hide, why is he hiding? Where did he go? And so when they filed suit, I did ask Deal, well, can you comment on this? Like, where is Alex? His name is Alex, and forgive me if I butcher his name, I think it's Bouaziz.

• 4:28Speaker 02

  Yeah.

• 4:28Speaker 01

  So they told me at that time that they said, well, Alex lives in Israel, but he was in Dubai for a few days for Passover with his family. And quote, they claimed that was something he's done for the past several years. This coincidentally, the same time that Rippling was trying to, you know, serve him with papers. So, you know, that was interesting.

• 4:47Speaker 02

  What's interesting to me, too, is that they still, I mean, maybe Deal has changed, so I should ask them again. But when I asked them fairly recently, okay, like, you said he was in Dubai just for a holiday, basically. Can you say where he is now? And, yeah.

• 5:02Speaker 01

  They couldn't.

• 5:02Speaker 02

  Deal will not comment on where the CEO is currently, for privacy reasons, basically. And so I do wonder, I haven't, most CEOs don't hide at least the country they're in. But, you know, I think it's a sensitive time and there's no legal obligation to disclose which country you live in. And that's how Deal is doing it now. So I just thought that was interesting that even now, they're still not really commenting on the location of the CEO and other executives. But we'll see if that changes.

• 5:32Speaker 01

  Yeah, we'll see. Interestingly, also in its countersuit, Deal made its own accusations against Rippling, including one saying that Rippling had solicited Deal employees to pass on to Rippling confidential, commercially sensitive information about Deal. So it's basically now accusing Rippling of doing what it was accused of, which was accusing Rippling of, quote, placing its own insider at Deal, essentially allowing it to eavesdrop on Deal's internal communications without Deal's permission. So, okay, I don't know what evidence it has of this. I have no idea. We don't know if that's true. In the case of Rippling's suit against Deal, we do have a confession, at least by this alleged spy, who detailed very explicitly all sorts of things, including how he was paid,

• 6:16Speaker 01

  text exchanges that he had with different members of the Staff, including CEO. It's really going to be very interesting to see how all this plays out. I think one thing that is also very interesting for our readers and listeners is the impact in general, like on X. People have been kind of having a field day commenting about all of this. And honestly, I don't think it's really voting very well for either company. It seems like a lot of potential customers or current customers seem to be very turned off by the drama. And one person I think I read as something like, I don't feel comfortable with either of these companies having my sensitive information. And so I I'm curious to see how this is going to impact their businesses. Now, having said that, I did just report a few days ago

• 7:00Speaker 01

  that Rippling raised a Series G, a $450 million Series G at a $16.8 billion valuation. So, looks like investors at least were not deterred by the drama, pouring more money into Rippling. And also, more drama, okay? Something else that Rippling revealed that is notable. They made a big deal of talking about that Y Combinator is now a customer. And Y Combinator, who Rippling was part of the winter 2017 cohort. And Y Combinator, in a case study, touted Rippling's offering as the HR, quote, "tool of choice for all of the Accelerator's founders." Okay, so why is that controversial?

• 7:44Speaker 01

  Well, it's controversial because Deal is also a Y Combinator grad participating in the winter 2019 cohort. So you almost wonder, is YC taking sides here? I mean, that's a very public support of one company over another. And what do you think, Charles?

• 8:03Speaker 02

  That's really interesting. I haven't looked into the YC angle specifically, but it is really notable that these two companies share like a very prominent investor, an accelerator like YC. On the note about people being put off by the fight between both sides, and it's true that both sides are very publicly mudslinging, and nothing has been proven definitively against either Deal or Rippling. So some people can be put off. And I noticed, right when Rippling first filed its suit, a competitor called Remote.com posted a blog called "Your HR Provider Should Be Drama-Free."

• 8:36Speaker 01

  Yeah, right.

• 8:39Speaker 02

  It's kind of an indicator of how cutthroat and competitive this HR tech industry really is, which is maybe surprising to some people. You think it's a bit boring, but turns out, not so much.

• 8:51Speaker 01

  Not at all, yeah. Rippling's CEO is Parker Conrad, and he used to run Zenefits. And there was a lot of drama upon his departure there. We don't need to get into all that right now. But I interviewed Parker onstage at Disrupt a few years ago. He's kind of known for being very outspoken and a bit of a controversial figure. Deal's CEO, Alex, I think he's actually co-CEO, or I could be wrong. Or maybe he is CEO, but he has a co-founder. I don't remember her name off the top of my head. He's generally come across as very affable, you know, in interviews and on social media. But when it comes to Rippling, he's not mincing words, I guess. He was pretty insulting, or at least the company was pretty insulting, about Parker.

• 9:33Speaker 01

  In its counter-suit, they basically described the executive as haunted by his previous failures and fueled by suffocating jealousy at his inability to fairly compete with Deal in the marketplace. So, the talks are getting personal, right? It's not just about company versus company. I mean, they went after Parker as an executive. So, it's getting ugly. It's been ugly. What is next, anyway, Charles? Like, I'm curious, what's next?

• 10:00Speaker 02

  Yeah, that's a great question. I mean, like I said, so far, nothing's been really proven in court or otherwise. I mean, what I'm watching, there's an involvement of another payroll giant. Well, sorry, it's not payroll, it's more of a fintech. It's called Revolut, one of the biggest fintechs in Europe. And they're involved because Rippling says that Deal bribed their employee, at least the first bribe.

• 10:23Speaker 02

  I think it was a $6,000 payment allegedly via Revolut to this alleged spy within Rippling. And so Revolut's involvement is like, of course, it's not directly involved. It's just a payments, you know, it's just a fintech that did the transaction. Obviously, they're not the ones.

• 10:40Speaker 01

  Yeah, they're not complicit.

• 10:41Speaker 02

  They're not complicit. All right, Rippling isn't alleging they're complicit, but they are still technically suing them in Ireland to be able to get the specific transaction details of that Revolut transfer. Because they want to be able to definitively prove that the person who made this payment to their employee was the wife of the COO of Deal, i.e. Deal.

• 11:03Speaker 01

  Oh, my goodness. How many, how many different people within Deal were allegedly involved in all of this, right? I mean, I can't keep, come on. I think there was the CEO, the COO, general counsel, who happened to be Alex Bozzi's father, who also, he, oh, sorry, he is a COO too, right?

• 11:20Speaker 02

  He's the CFO, that's Philippe Bozzi's, Alex is his dad, yeah. He's an interesting guy on his own, right? A very successful French entrepreneur, tech entrepreneur, whose company went public and still exists in France. So, yeah, it's a very interesting family. And I know there's others, I think other family members who work at Deal as well.

• 11:45Anthony Ha?

  What moves our world forward? Energy. History has been shaped by it, revolutions won with it, and progress dependent on it. For 190 years, Schneider Electric has been a leading force in this story, creating the technologies that harness energy and transform the competitive landscape. And today, in the dawning era of energy and industrial intelligence, Schneider is helping customers build more efficient, resilient, and sustainable operations across every sector, from data centers to homes, from buildings to industry. Schneider Electric, your energy technology partner. Discover more at se.com.

• 12:23Speaker 01

  Can we talk a minute, though, about the fact, another thing that I saw a lot of people commenting about on social media was that this alleged spy was getting paid $6,000 US dollars per month for all he was supposedly doing, which everyone's like, whoa, is that all? Like, I mean, is that all he got paid? Like, everyone was kind of shocked. You know, honestly, I won't say his name, but even though it's publicly out there, it sounds like this whole ordeal took its toll on this alleged spy. He seemed to be really struggling toward the end of, when it was starting to come out that the spying took place. I think he almost kind of had a, allegedly had some kind of nervous breakdown. And finally, I think people who knew him and knew what had happened encouraged

• 13:06Speaker 01

  him to just confess, because I think it was just really eating away at him from what I read. And so then I think that's when he finally just agreed to, like, share details of what went down.

• 13:16Speaker 02

  Yeah, that's what he says in the affidavit. But of course, Deal, I'm sure, would have a different take on why. I think Deal has been saying that this alleged spy was actually a whistleblower who was potentially finding out bad things that Rippling was doing regarding, you know, sanctioned countries. He was a whistleblower supposedly for Rippling. So there was a lot of back and forth in this, and it's a bit hard to keep track, but...

• 13:40Speaker 01

  Oh, that's right, because Deal's accusing Rippling of violating sanctions law in Russia.

• 13:45Speaker 02

  Yep, and like various other, yeah, but I did find the discourse around the alleged bribe payments quite funny as well. I'm French, I'm not American, and so like, there's an ongoing debate in tech about like, oh, Europeans, their salaries are so low, their tech companies are so small. And like, that became part of this discourse about like, only in Europe would someone accept 6K or 5K a month to spy.

• 14:10Speaker 01

  Right, right. Yes, that was something I saw a lot about across X. So, do you know if the papers were ever actually served?

• 14:19Speaker 02

  So they were served, yeah. And Deal has been saying, look, we accepted service. We've agreed to accept service. There's no drama here, basically.

• 14:26Speaker 01

  Oh, that's right. Yeah, they did agree to it.

• 14:28Speaker 02

  They did agree. It's just that it took them a little bit of time to publicly... Agreed to be served.

• 14:33Speaker 01

  Yeah, it was Alex, lawyers, Asif Malik and Andrea David Mealy. They all agreed to accept service through.

• 14:40Speaker 02

  Exactly, through their Irish law firm. But that only happened about, I think, two weeks after we reported he was in Dubai. And at the time, Deal wasn't saying they were accepting service through a law firm. But within that time, they changed their law firm in Ireland. The new law firm says, actually, we can accept service and it's not a problem.

• 15:00Speaker 01

  Okay.

• 15:01Speaker 02

  So now the whole getting served drama, I think, is over unless I don't see any indication that it's popping off again. So to me now, the big question is, like I said, will this Revolut payment transaction? Like, first of all, will Revolut be able to disclose sensitive details about a transfer? Because in Europe, that's really difficult because of the GDPR. And usually, companies can't disclose things like passport information or like sender details without a court order. I'm not sure if the Irish court can actually give an order for Revolut to reveal this. Rippling is trying, I think, but it's not clear to me if it'll be successful or not. So we'll see. And then it all hinges on whether the sender details turns out to definitively be

• 15:44Speaker 02

  the wife of Deal's COO, who is Dan Westgarth. And what I found quite interesting, reporting this story, was that at the time of this transaction, the wife of Deal's COO was apparently working at Robinhood in compliance.

• 15:59Speaker 01

  Oh. Oh, wow, gosh, wow, this is all, fintech is such a small world.

• 16:04Speaker 02

  But this is all allegedly because there's no.

• 16:06Speaker 01

  Right.

• 16:07Speaker 02

  You know, the only proof Rippling has is that her first and last name are on the receipt of this Revolut transfer. But of course, there's lots of different people who could have that name. So that's why they're trying to get the real details behind it.

• 16:18Speaker 01

  I thought it was interesting, too, that Deal's head of comms, Elizabeth Diana, she resigned. Pretty early into all of this, I think it was right after the affidavit came out. She didn't comment on her resignation, but I did find that interesting as well. And I think she was also named, right, in the suit?

• 16:35Speaker 02

  Yeah.

• 16:36Speaker 01

  Charles?

• 16:37Speaker 02

  She was named in the suit and Rippling alleged, and to be clear, I don't think Diana herself has responded to the allegations specifically against her from Rippling. But Rippling alleged that Diana was part of this kind of, I'm not sure they alleged that she knew that there was a spy, but they said she as a communication person was trying to give a reporter from the information some sensitive things about Rippling to try and make Rippling look bad in an upcoming feature article.

• 17:05Speaker 01

  Oh, and was that information supposedly stuff they'd found out through the alleged spy?

• 17:11Speaker 02

  I think so, yes. So, but to be clear, I'm not sure whether Diana herself actually knew where this information was coming from.

• 17:18Speaker 01

  We don't know that.

• 17:19Speaker 02

  Comms people, you know, that is kind of, their role is to make a company look good. And I think it's not unheard of, but it is an interesting thing that she resigned and she hasn't publicly given any reason for it.

• 17:31Speaker 01

  Right, and she'd been there for a few years. So, yeah, I mean, there's just so many moving parts. One thing, and I don't know if you know, Charles, I don't know if anybody knows, but one thing that I'm really curious about is if Rippling is able to prove that all these accusations are true, what can happen to Deal? Like, I've seen things, again, people are like, oh, that CEO needs to be arrested, or, but really, is that, I don't know, does anybody know? Like, what are the potential consequences for Deal? And even if Rippling too, if it really did have its own kind of spy, like, what can happen to them?

• 18:03Speaker 02

  It's a great question because amid all the drama, I think people might forget, like, none of these cases are criminal. This is all civil suits flying in the US and Ireland. Usually when there's accusations of this level, like, you will find things like the DOJ involved or things like that, or sometimes, you know, the DOJ investigates founders for lying to investors and like, so far, I haven't seen any sign that this is actually anything criminal. So, people speculating about Deal's CEO is about to be arrested, or Rippling likewise, or whatever, I don't see any legal reason for that to be happening. But the problem is, though, that legal cases are unpredictable and You never know what could happen next with either party. So it's hard for me to speculate on the legal impact because I'm not a lawyer and it seems very complicated.

• 18:48Speaker 02

  What's interesting to me is the impact on things like Deal's upcoming IPO. Deal says publicly like they want to IPO soon and this whole drama hasn't dissuaded them whatsoever. They recently made some legal team hires, as did Rippling. But with Deal, I think they mentioned in their announcement, you know, we're hiring someone. And one of the people they hired, they said was like, this will help us clear the path for an IPO. And this was recently, this was well after this whole spy drama. So I think it just shows that Deal, at least publicly, is very clear that they want to IPO. Basically, they want to make it clear that this isn't affecting their prospects. And so what to me is really interesting is how will this case affect Rippling and Deal's

• 19:28Speaker 02

  things like valuations, IPO prospects, potentially leadership composition? I mean, you never know with companies, sometimes there's drama around that. So far, there's no indication of that happening with either Deal or Rippling, but this case is explosive enough that it might cause some shakeups eventually. I mean, I wouldn't be surprised.

• 19:46Speaker 01

  Yeah.

• 19:47Speaker 02

  You never know.

• 19:48Speaker 01

  I am really curious to see what impact this could have on either business and what could happen to any of the executives. Well, as I mentioned earlier, I mean, Rippling actually just had a big valuation jump. I mean, in April 2024, it was valued at 13.4 billion and with this most recent round, which was announced just last week, 16.8. So again, so far, at least right now, doesn't seem to be hurting the company, but that remains to be seen and you know that we're definitely going to be paying attention. But it looks like we are actually running out of time, Charles, and this went by really, really fast, as expected, when we talk about such an interesting topic. But I'm excited and glad that you were able to hop on the mic and kind of go over this with me.

• 20:28Speaker 02

  No, I mean, it's great talking with you, Mary Ann. And yeah, you've done great coverage on this case as well. And it can be really hard to keep track of all the accusations and the mudslinging, but it's definitely one of the most interesting startup dramas I've ever covered, and especially in such a kind of a state and old school industry as payroll and HR tech. Yeah, we'll keep close watch on what's going on and. You know, as always, head to TechCrunch for the latest updates and we'll see what happens, basically.

• 20:55Speaker 01

  You've had a bunch of awesome scoops, Charles. So, thank you so much again for joining us on the show. To our listeners, you can find me on X at Bay Area Rider. Charles, where can they find you?

• 21:06Speaker 02

  Yeah, you can find me on X at my name, so Charles Rollet, that's R O L L E T one. That's my handle on X.

• 21:13Speaker 01

  Ah, okay. So there's another Charles Rollet out there, I guess. Yeah.

• 21:18Speaker 02

  There's an imposter. Actually, Charles Rollet is not an uncommon name in France. There's a bunch of us. So make sure you find the right one.

• 21:24Speaker 01

  The right one, that's the one at the end.

• 21:26Speaker 02

  Yeah.

• 21:26Speaker 01

  And then you can also follow Equity at EquityPod. Thank you all so much for listening and talk to you next time. Bye bye.

• 21:35Rebecca Bellan?

  Equity is produced by Teresa Locan Solo with editing by Cal. We'd also like to thank TechCrunch's audience development team. Thank you so much for listening and we'll talk to you next time.