By Krystal Hu and Niket Nishant
Unclear if customers' funds would be recovered by Monday, he started to seek alternative capital from investor, whose funds were also partly stuck with SVB.
This fundraising event, put together within 24 hours, highlighted how the tech ecosystem, from startups to investors, was deeply unsettled by the surprising and fast collapse of Silicon Valley Bank, formerly a unit of SVB Financial SIVB.O.
Growth equity firm Greenoaks was one of Rippling's investors that have funds available to wire on Monday. The two agreed to keep Rippling's valuation from May 2022, in a rare flat round when late stage companies' valuations were falling amid higher interest rates.
"We were intending to raise money either later this year or early next year. We pulled it forward about a year and it's going to buy down any risk that we have around what happens with SVB on Monday. It's a small amount of dilution for the company," said Conrad.
By Sunday afternoon, as the U.S. Federal Deposit Insurance Corporation (FDIC) guaranteed all depositors of the bank access to their money, Rippling and Greenoaks decided to proceed with the funding, although Rippling no longer needs the funds to cover its clients' payroll.
Sitting on over $1 billion cash, Conrad said he hopes this is the company's last private raise, adding the not-yet-profitable firm has no specific plans for a public listing.
San Francisco-based Rippling offers services to businesses to manage their human resource and information technology operations such as employees' onboarding and payroll management. It said it has over $100 million in annual recurring revenue, which grows at over 100% annually, serving over 400,000 users across industries from retail to healthcare.
Conrad said the company will keep investing in R&D and product development.
SVB Financial seeks bankruptcy protection as banking turmoil persists
ECB watchdog sees no Europe contagion after US, Swiss bank rescues
First Republic shares fall despite unprecedented Wall Street rescue deal
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Major US banks inject $30 bln to rescue First Republic Bank
ANALYSIS-Is the backlash over SVB collapse a threat to 'woke' investments?
ANALYSIS-SVB's climate tech clients face humbling funding questions
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GRAPHIC-Americans opt to keep their money with the bankshttps://tmsnrt.rs/3LrAFxq
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(Reporting Krystal Hu in San Francisco and by Niket Nishant in Bengaluru; Editing by Shounak Dasgupta and Nick Zieminski)
((Niket.Nishant@thomsonreuters.com))
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