Spy games in HR tech: Inside Rippling’s wild lawsuit against Deel

Rippling’s latest lawsuit reads less like a legal filing and more like the plot of a corporate espionage thriller, complete with secret crypto payments, an alleged mole, and a fake Slack channel trap. This week, the HR tech startup publicly named the employee at the center of its case against its rival Deel, claiming the company paid him thousands to spy from the inside. Deel, however, is not staying quiet. The company is denying the claims, calling it a dramatic distraction from Rippling’s own legal troubles. Today, on TechCrunch’s Equity podcast, hosts Max Zeff and Anthony Ha are catching us up on the week’s headlines, including a breakdown of how this saga between two HR tech giants escalated from business rivalry to accusations of racketeering, and why, according to Max, smashing the phone you use for corporate espionage with an ax at your mother-in-law's house is “the oldest trick in the book.” Listen to the full episode to hear about: The startup that’s gamifying the tax filing process, and the copyright questions that continue to rise Circle’s IPO and what the move could signal for others in the crypto space. The latest in the AI race — from OpenAI’s record-breaking raise and GPU meltdowns to Anthropic’s AI chatbot plan for colleges and Google’s Gemini leadership shakeup. Equity will be back next week, so stay tuned! 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, your energy technology partner.

• 0:17Speaker 01

  Hello and welcome back to Equity, TechCrunch's flagship podcast about the business of startups. Today is Friday, April 4th. I'm Max Zeff, a senior reporter at TechCrunch.

• 0:27Anthony Ha?

  And I'm Anthony Ha, TechCrunch's weekend editor. Kirsten's off today, but she'll be back next week. So Max and I are gonna, on our own, try to handle some transportation news, specifically Tesla. Obviously, there's, there's a lot going on with, with Elon Musk and politics and tariffs and other companies, but we'll start off with Tesla, which reported that it had the worst deliveries in two years. And I think it's hard to pull apart exactly how much of that is because of the backlash against Musk, which I do think is a huge component. I mean, there's like, you know, protests happening at virtually every Tesla dealership in the US. But also, I think there's a lot of macro stuff that is affecting Tesla as well, where I think their, their business has been sort of struggling, it seems like, for a little

• 1:10Anthony Ha?

  while, even before the Trump administration. So that's one thing that's happening with, with Musk. And then Max, you and I, I mean, mostly you, also worked on another big Elon story.

• 1:20Speaker 01

  Yeah, so last week Elon Musk said that XAI, his AI startup, acquired X, his social media platform, formerly known as Twitter. He noted at the time that XAI in this deal was worth about $80 billion and X, the social media platform, was worth $33 billion. But of course Elon Musk owns both of these companies. A lot of the investors and bankers working on this are kind of the same group of people. Someone, I think, put it really well on X when they said that it's kind of like I sold myself my Honda Civic for $2 million, which I think is an apt kind of explanation of this. That said, we have a lot of other stuff to get into on the show this week.

• 2:02Speaker 01

  Today, we have deals of the week from the crypto giant Circle, as well as an accounting startup that turned tax preparations into a Pokemon showdown game. Later on the show, we'll get into kind of some bits of the AI race that are shaping up, and also an affidavit from a Rippling employee caught spying for a deal.

• 2:21Anthony Ha?

  So yeah, maybe let's start with the first deal of the week, which is Circle. This deal feels like a kind of a throwback in a few different ways. Circle, for people who don't know, is the issuer of USDC, which is a stablecoin pegged to the US dollar. And they actually tried to go public via a SPAC in 2022. That didn't work out, but now they're kind of aiming to go public again. We don't know exactly what the IPO is going to look like yet. There's often placeholder numbers in the initial filings, but they did kind of share some of their numbers about their finances. Their revenue in 2024 was 1.68 billion, up from 1.45 billion the year prior. And their net income was 156 million, which was down from 2023.

• 3:06Anthony Ha?

  I think what's also striking about this, beyond whether or not you're excited about Circle specifically, is that it does seem like interest in crypto is up again. And I think, again, we have to talk a little bit about politics, too. I think this is a... The Trump administration in general seems to be boosting crypto a bit. I mean, Max, is that something you've been seeing, too?

• 3:27Speaker 01

  Absolutely. I mean, David Sacks, a famous venture capitalist in Silicon Valley, was appointed to be Trump's crypto czar, as well as the AI czar. But definitely crypto is getting a lot more attention right now. I think this IPO is really interesting. I mean, this does seem like one of the more kind of stable... It's got the word "stablecoin" in its description, but it definitely seems like one of the more valuable crypto businesses. That said, I'm really skeptical about all of these future IPOs right now, given what just happened with Trump's tariffs earlier this week. Trump announced tariffs that are really negatively impacting a lot of tech stocks. It's possible that a crypto giant wouldn't be exposed to that, but there's just a lot of market uncertainty right now.

• 4:13Anthony Ha?

  Right. And I mean, specifically, again, the selling point of a stablecoin is that it's supposed to be pegged to a fiat currency, in this case, the US dollar. I mean, I'm not an economist, but beyond tech stocks, I mean, just in general, the global economy, the US dollar, these things do not necessarily feel particularly stable right now. So they've withdrawn one IPO. It doesn't seem... Crazy to me that they might end up delaying a bit as well.

• 4:42Speaker 01

  Right, right. But this is a space that really we're seeing a lot of interest in. Anthony, you wrote last month something about Trump calling for a creation of a crypto strategic reserve. Can you just explain briefly what that is?

• 4:54Anthony Ha?

  That is, that's a great question. I'm not sure how completely I can explain it because I think, I mean, there have been now, I guess, a couple of different executive orders to this effect. And a lot of confusion about exactly what it means. I think what it seems like they've settled on for now, who knows what it'll actually end up becoming, is something maybe smaller than people were expecting, which is basically, you know, there's a variety of companies that the government has seized their assets, their crypto assets. And so Trump has said, why don't we create a reserve basically from those assets? So it's not a case that we know of so far. I mean, again, who knows where the government's going to go out and buy a bunch of Bitcoin or whatever, which I think people at first thought it wasn't going to happen because he didn't mention Bitcoin

• 5:39Anthony Ha?

  in his initial post. And then he's like, no, no, I love Bitcoin too. And then their price also went up. But at least for now, it doesn't sound like the government is going to be buying a lot of crypto. Instead, it's simply going to sort of hold the crypto that it's seizing for other reasons. Although then it also makes me wonder if we're sort of heading into this really deregulatory environment where potentially the government isn't seizing that much crypto, they're just like, whatever, go for it. Then I don't know how, that seems like the reserve is going to be even smaller.

• 6:08Speaker 01

  Right, right. If you're kind of wondering why we're hearing about so much crypto again these days, I mean, this is really a big reason is that, you know, Trump has signaled that this is something they want to do more seriously again. And as a result, these practical sort of implementations of cryptocurrency are getting a lot more attention. I think this is something we're going to see a lot more of. But we probably should move on to our next deal here, which is that an accounting startup has turned tax preparations into a Pokemon showdown game. This isn't exactly all about the deal here. They launched earlier this year, this company opened Ledger and raised a $3 million round, but it's tax season. This is something everyone's got on their mind and they created a really fun way to do this. Anthony, what did you think?

• 6:53Anthony Ha?

  I mean, it sounds cool. I think it's interesting because I I've been thinking a little bit more about my relationship with various kind of like gamified apps, even things that are supposed to be good, right? Like I have, you know, a meditation app that's sort of gamified. I have a, you know, Duolingo, a language learning app. And in general, I like that. It's fun, but it also sometimes then can like create these weird incentives where they're just trying to like drag, you know, Duolingo is just like, hey, you gotta come back. You gotta maintain your streak. And I'm like, actually, like, maybe I'm ready to take a little break from this. And I don't know what the negative scenario for that looks like for taxes because presumably, you know, most of us are not doing our taxes. Going to be worried about like trying to maintain a tax streak in November. But beyond that, I mean, I think it sounds fun. I mean, I do think very few people enjoy doing their taxes, something that makes it

• 7:37Anthony Ha?

  a little bit more enjoyable. Seems like a reasonable suggestion. It also seems like this, they're not the only startup that's trying to do something in this vein, right?

• 7:45Speaker 01

  Right. I think that there's a lot of, you know, kind of people who are trying to do stuff like this to kind of gamify the sort of tax experience. I do think it's really interesting. Obviously, the story with, you know, software and taxes is, you know, TurboTax and Intuit have basically dominated the space for a long time. It's been pretty well reported that they've lobbied the government to try to make it more difficult for, you know, easy kind of free tax solutions to surface. And I think that this seems like one of them. And I think it just sounds fun. I think it's just, it's just like a cool project. This seems like a small company right now, but who knows?

• 8:22Anthony Ha?

  Well, I know there are other areas of AI where you've written about potential copyright issues. Did the fact that this product is called Poketax raise your eyebrows at all?

• 8:32Speaker 01

  Absolutely. I mean, I think that we can't exactly ignore the copyright concerns here, but honestly, I mean, given the, you know, ChatGPT, Studio Ghibli kind of image creation craze that happened last week, I think that all of this copyright stuff is just so up in the air right now. I think it's so hard to tell who is infringing on copyright, whether this stuff, these companies are going to come after you for doing this kind of thing. I think that we really are still in kind of a wait and see moment. And in the meantime, these companies are not exactly waiting. They're just kind of doing it and saying, who knows? Maybe it'll be fine.

• 9:10Anthony Ha?

  I mean, the way this is described also to me seems to sort of sit. I mean, and maybe this is true for most early stage starter products. Like I was like, is this like their core business? Are they really gonna, is poke attacks gonna be their big thing? Or is this more like a fun side project? And it sounds like it's a little in between in that it's like a first product. They did sort of reassure people that it's not an April Fool's joke, but they do also intend to sort of bring this approach to maybe other kinds of financial software.

• 9:36Speaker 01

  Sure, sure. And it definitely could be, you know, I'm, you know, a relatively younger person. I just started filing my taxes and it is definitely just not a fun thing. So I think that a lot of young people might be interested in doing something like this. We do need to move on, but after the break, we are going to dive into the AI race and how OpenAI, Google and Anthropic are trying to stay ahead of one another.

• 10:05Anthony Ha?

  Every company today is looking for an edge. Better insights, faster decisions, greater resilience. But as AI drives new growth, it also creates new demands on energy and infrastructure. Schneider Electric is connecting energy, automation and digital technologies to help organizations make smarter decisions and operate more efficiently. Because the future won't be shaped by AI alone. It will be shaped by energy and industrial intelligence. Schneider Electric, advancing energy tech. So Max, last week we talked about OpenAI raising this $40 billion round, the biggest venture round, breaking the record that OpenAI had already set. And I think there's sort of more about that, but also I think things to talk about in terms of like, what does, like, what does this mean for the rest of the AI field?

• 10:50Anthony Ha?

  Like, how are other companies trying to catch up?

• 10:52Speaker 01

  So yeah, I mean, OpenAI closed that big deal that we talked about. And at the same time, Sam Altman, OpenAI CEO, says that the company is experiencing capacity issues and that it will cause product delays. I mean, they've been, executives at the company have been tweeting this week that their GPUs are melting, which is implying that they are getting so much uses of ChatGPT that their hardware is liquefying into a molten metal substance. But that said, I think that there's some piece of this where they really want people to think that ChatGPT is getting so much usage. So how true it all is, there's some incentive in there for them. But at the same time, Anthropic, one of OpenAI's biggest rivals, launched an AI chatbot plan for

• 11:34Speaker 01

  colleges and universities called Claude for Education. What do you make in general of kind of AI in education?

• 11:42Anthony Ha?

  I'm really of two minds about it. And I should say, sort of, you know, full disclosure, my partner works for the New York Public Schools. So this is something she has to deal with on a day by day basis and, you know, maybe occasionally complains to me about. But on the one hand, I think the argument for incorporating more AI into education is like, it'd be like telling students, you know, 20 years ago, you can't use Google. Like, you're really like, leaving them behind, you're not preparing them for the future. And so I do think it is worth having conversations about how to incorporate AI into the classroom. That said, it seems like most of the low hanging fruit here just kind of is terrible and not good for students and doesn't like, it doesn't increase their skill anyway. It just gives them easy ways

• 12:25Anthony Ha?

  to cheat and create essays that are like terrible for the teacher to read. And then maybe the teacher is also running the essay through like ChatGPT to see what the grade should be. And then the student doesn't learn anything from it. And so there is potential there, but also like, just tremendous danger and stupidity. And it seems like right now, mostly, we're seeing the stupidity.

• 12:45Speaker 01

  Definitely. I think one interesting thing, Anthropic is kind of known for taking a more kind of responsible, safe approach to AI. And I think that that's what they're trying to do here by offering it directly to college students. One piece of Claude for Education is Learning Mode, which is a new feature in Claude, which tries to help students develop their own critical thinking skills, rather than giving them immediate answers to questions. Learning Mode will ask questions to test a student's understanding and kind of highlight the fundamental principles. It's trying to kind of take all the kids that are just using AI to cheat on their homework and trying to, you know, ask them a follow-up question and say, well, what do you think about that? Maybe it gives you some part of the answer, but you know, kind of pushes you a little

• 13:29Speaker 01

  further. To be frank, I think if I was a college student, I would use the tool that just gave me the answer. But I think if my college was just paying for this, I think it's an interesting idea to kind of get kids to use it more. But really, all of these companies are just trying to drive up usage in any place they can. And I think that's what we're seeing here.

• 13:49Anthony Ha?

  Right. So yeah, there's Anthropic. It's also maybe worth talking about Google a little bit because there's been a lot of reporting about, including from you, basically about how Google is, feels like it's behind and is trying to catch up.

• 14:02Speaker 01

  Yeah. Google was famously kind of caught flat-footed in 2022 when ChatGPT released. Google was an early pioneer in AI and they basically didn't have a competitor to ChatGPT for like a year. But now it's a completely different story at the company. Google has really picked up the pace with their model launches. Semaphore reported earlier this week that Gemini is shaking up its AI leadership ranks and they have a new person who's running Gemini. It was the same person who created the viral Notebook LM, which creates podcasts from PDFs. But at the same time, I interviewed the person who's leading kind of the AI model division of Gemini. This is the product lead for their AI models. And she told me that Google is really...

• 14:48Speaker 01

  Taking a concerted effort to speed up right now. They just launched a state of the art AI model Gemini 2.5 Pro. And it's only been three months since they launched their last kind of big family of AI models. She says it's a very deliberate effort at the company. But at the same time, I think people are starting to be concerned that they're not kind of reporting on safety and they're not kind of giving these high level safety reports that people are expecting from them.

• 15:16Anthony Ha?

  I mean, the other thing I wonder about is, I mean, so like a company like Anthropic, obviously they're all in on AI because they're literally an AI company. For Google, obviously you don't want to get left behind for sort of what the next big wave is. But also they have all these other products where the most high profile is is Google Search itself, where, you know, I would argue that generally the AI summaries have made the experience worse, not better. There have been some exceptions, including actually recently this week, I I got some like software advice from the AI summary that I could not find in the regular Google search and it worked. So, I mean, it's getting better, credit where it's due. But I I think the sort of conventional wisdom is that like a company like Google or Apple

• 15:57Anthony Ha?

  just needs to be going all in on AI right now because they just have to or they're going to get left behind. Is there a counter argument that like, hey, that's not really their core competency? And and let the open AIs and the anthropics of the world focus on it. And then they can sort of incorporate what they need to incorporate.

• 16:12Speaker 01

  I think that there's, you know, this kind of idea in the tech world that these AI chatbots are really where the puck is going right now. Like even though search is still a huge market today. I mean, it's a huge just money printing machine for Google. But I think there's this idea that at some point, people are going to want to use AI chatbots more. And then eventually, Google's going to flip a switch, as the idea at least, and just put Gemini in Google Search. I mean, they released kind of their AI search perplexity competitor last week or two weeks ago. And it's a really compelling vision for how to get answers. Like you said, like, it's starting to be pretty useful, these tools. But I think that there's a big concern that some of these companies are moving too fast now.

• 16:55Speaker 01

  Like, like they they have successfully kind of pushed all their efforts behind AI. But maybe they're not documenting these kind of models that they're releasing in in a way that the research community is happy about. I think it's a big concern in the AI safety community. But also, I mean, it's also just. Frankly, could be seen as a financial risk in some ways, you know, like just that they're betting so much on these data centers and these very expensive, you know, AI product leaders and researchers. And it's just frankly, still kind of untested. It's still a bet.

• 17:28Anthony Ha?

  We should say that I think like Google is not alone in having sort of like reports and concerns about its approach to safety. Certainly, OpenAI, there are sort of dozens of articles about people, sources saying things about, you know, maybe allegedly cutting corners on safety at OpenAI as well. And you mentioned that Anthropic sort of has a reputation for maybe taking safety more seriously. Is that still your kind of impression that if we were to pick one that kind of stands out there?

• 17:53Speaker 01

  Anthropic definitely does take a kind of slower, more methodical approach to, you know, their safety reporting. They definitely don't ship products very fast. I mean, that's kind of a defining feature of Anthropic is that, you know, they only recently launched an AI chatbot with web search capabilities. And I think a big reason for that was that they wanted to make sure it was safe before they rolled it out and that they could release a lot of public research about it and how it changes their models. But I think that you risk falling behind in the AI race. And Google, as a public company, it's really existential for them to keep up. And investors are really watching the space closely. But

• 18:34Speaker 01

  we probably should talk about the juiciest drama in the venture world, which is Rippling and Deal, kind of the next chapter unfolded.

• 18:43Anthony Ha?

  Yes. Again, this is something that we talked about on a recent episode. Rippling was accusing this competitor, Deal, of recruiting a Rippling employee as a spy. And basically, like they claimed they had sort of all this kind of like forensic evidence and Slack and things of that this person had been looking for information at the behest of Deal. What came out this week was apparently the employee in question has now decided to cooperate with Rippling. And he gave an affidavit where he seemed to confirm what Rippling's accusations were. And we could, you know, take 30 minutes just summarizing the whole thing. One of the things I will say that, and maybe this is very shallow of me,

• 19:26Anthony Ha?

  but one of the things that was very surprising to me was just the fact that he was getting paid 5,000 euros a month for this, which is about 6,000 US. I feel like if I was going to be engaging in corporate espionage, I would want it to be for life-changing amounts of money. And 6,000 dollars a month is not nothing, but I wouldn't say it's life-changing.

• 19:46Speaker 01

  Well, hold on, Anthony. Did you know that he was later paid 5,000 dollars in crypto? And would that change your mind?

• 19:53Anthony Ha?

  I think that would turn it into a hard pass.

• 19:56Speaker 01

  Got it. Okay, just clarifying. But continue. I'm curious to hear more about this.

• 20:02Anthony Ha?

  Yeah, I mean, some of this, again, is just essentially confirming what Rippling had said, which was Deal recruited him. He was a Rippling employee already. He interviewed for a job at Deal, and then he didn't get the job, but Deal was like, hey, do you basically want to spy for us? And he was going through Slack and other resources, keeping an eye on things and giving the Deal heads up on what Rippling was doing. The way that kind of came to a head and the way Rippling says they confirmed it was him was that they basically created a fake Slack channel that really only existed as sort of like a honey trap. And they told Deal like, hey, you know, I think they notified, I forget exactly what the exact wording was, but just they told Deal that this Slack channel existed.

• 20:44Anthony Ha?

  And the only way this guy could find out about it is that basically the Deal executives immediately went and said, hey, go look at this Slack channel, which apparently he did. And then, when they decided to confront him, the story before was that he had gone into the bathroom, locked himself in the bathroom and flushed his phone down the toilet. Now, he says, no, no, no. I pretended to flush my phone down the toilet. I still left the office and then I went to my mother-in-law's house and I smashed it with an axe, which he claims he did basically on the advice of Deal. We should say that as far as I can tell, Deal has not responded to his affidavit. Deal did initially say Rippling is basically just making stuff up because they have their own negative publicity

• 21:27Anthony Ha?

  around potentially violating sanctions with Russia. And Rippling has said, actually, no, we have. Smoking gun here. Max, what did you make of all this?

• 21:34Speaker 01

  Well, I will say that smashing the phone you use for corporate espionage with an axe at your mother-in-law's house is the oldest trick in the book to get out of this kinds of things. So just well done by this spy. But no, I think that this is really just a complete hot mess for both of these companies. I mean, say what you will, like if you are trying to sell a HR software, HR, you want it to be about as boring and run-of-the-mill as possible. You just kind of want it to help your company work. And these companies are involved in like a movie level situation right now of drama. And, and I'm just not quite sure how these companies got wrapped up into this. But Rippling clearly believes that it has kind of a smoking gun, so to speak.

• 22:15Speaker 01

  It feels like this affidavit is basically undeniable evidence from this employee that Rippling was part of this. I mean, I will say Rippling is, yeah, like you said, they've denied any wrongdoing here.

• 22:26Anthony Ha?

  Has denied wrongdoing, rather.

• 22:27Speaker 01

  Sorry, yes, Deal has denied any wrongdoing here. But it's worth noting that Rippling is being represented by Alex Spiro in this case, which is a lawyer who is kind of famous for representing Elon Musk, Jay-Z, and Eric Adams. So he's kind of known for these dramatic, high-profile cases. So it's not entirely surprising to me that this is, you know, such a fantastic kind of story that he spun up here.

• 22:53Anthony Ha?

  Right. And also that Rippling is led by Parker Conrad, who is also this kind of very polarizing figure in Silicon Valley. Who I think there are a lot of people who admire him and the businesses that he's built. But he also seems to have, let's say, a flair for the dramatic. You wouldn't want to get on his bad side, let's say. And so it is interesting because, like you say, HR software is not a field that you would expect to have this kind of high drama. Although I think there is also a school of thought, like even less litigiously, like a company like Salesforce and Marc Benioff, where you take a product that's very boring and then you really try to like jazz it up with, with, with like the right marketing presentation. This is taking that approach to the extreme.

• 23:35Anthony Ha?

  I mean, I don't think that's actually what they're doing here, but Rippling and Deal clearly have a lot of bad blood. And that may not be primarily for PR purposes, but there is clearly a PR strategy at play here. And Rippling really is like, we are going to go after Deal. And, you know, to be fair, it does seem like they have some pretty compelling evidence.

• 23:53Speaker 01

  Right, right. I mean, this is definitely the most that a lot of news organizations have written about rippling and deal in the last year. That said, we are just about out of time here, but Equity will be back next week. Kirsten should be back next week as well. But until then, you can find Equity under the handle at EquityPod on X and Threads, and we'll see you next time.

• 24:17Rebecca Bellan?

  Equity is produced by Teresa Locan Solo with editing by Kel. 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.