Rippling reported that it managed to raise funds in the amount of $ 500 million within 12 hours.
The firm has attracted new investments as part of efforts to strengthen its financial position after the collapse of the Silicon Valley Bank. This company is a provider of personnel management software. Rippling helps its clients with things like payroll, benefits, and expenses
In a blog post, the company’s CEO, Parker Conrad, reports that the company secured funding in a round led by Greenoaks, at the same valuation of $11.25 billion as with a more traditional raise in May 2022.
After SVB sued the FDIC last Friday, Rippling faced a very serious problem, which is that more than 50 thousand employees of its clients risked being left without wages.
The company, as reported by Parker Conrad, decided to increase its equity by almost $ 130 million to finance customer payments to its workers.
The head of the firm notes that was the problem with making payments. The company used the software infrastructure of the Silicon Valley Bank. This solution provided reliable transactions worth billions of dollars every month. All the company’s systems were built around this financial institution.
The problem was still solved and did not turn into a financial tragedy. Given the potential risks, the company previously opened accounts with JPMorgan Chase as a backup payment infrastructure to avoid a single point of failure. The firm managed to switch to JPMorgan in order to receive salaries for employees.
But $545 million of the company’s customers’ money was locked in a Silicon Valley bank. Parker Conrad contacted a Greenoaks investor, and a $500 million contract was signed 12 hours later.
As of now, all funds from the failed Silicon Valley bank have been returned. The company has just under $1 billion in cash on its balance sheet. The firm also moved its banking operations to JPMorgan Chase. The payroll process is carried out without failures.
As we have reported earlier, Payroll and Benefits Fintech Catch Shuts Down.