Rippling's suit against Deel is wild
Forget martinis and fast cars, how about cellphones and toilets?
Today’s regular newsletter is out, but we had to double dip today due to Rippling’s suit. — Alex
Rippling is suing Deel, alleging that its competitor “cultivated a spy to systematically steal its competitor’s most sensitive business information and trade secrets.” As far as startup drama goes, this is a nuclear bomb.
Deel is backed by a16z, Spark Capital, Y Combinator, and other incredibly well-known names. Rippling is backed by Kleiner Perkins, Founders Fund, Sequoia, and others. As a pair, the two companies have raised around $3 billion, and both sport multi-billion dollar valuations. Deel was most recently valued at $12 billion during a secondary transaction, while Rippling is worth around $13.5 billion as of its Series F raised last year.
So, what did one decacorn allegedly do to its decacorn rival? The suit is a barnburner.
First, Rippling hires a person (called “Deel Spy,” or “D.S.” in the suit):
In November of 2024, Rippling noticed that D.S was executing some very interesting searches:
D.S., being the alleged spymaster that they were, “frequently accessed various channels in ‘preview’ mode— allowing him to see the contents of the channels without “joining” them,” Rippling alleges. However, logs show that D.S. did not ‘preview’ channels at the start of their employment, but later did so with great regularity.
Was D.S. simply poking around to do their job? Rippling says no:
To what end? D.S. was allegedly finding out whom might churn from Deel to Rippling, and frontrunning those conversations. After noting that D.S. had “searched ‘deel’ 27 times on Slack” in a single day:
Oof. D.S. also allegedly “downloaded information about Rippling’s existing customers on more than 600 occasions between November 2024 and March 2025.” Oh, and:
More recently, in the course of just a few weeks, “at least seventeen (17) members of Rippling’s Global Payroll Operations Team were contacted about similar jobs at Deel and at least ten reported receiving offers from Deel.”
Later, a reporter from The Information reached out to Rippling replete with a host of screenshots of internal Slack messages.
There’s a lot to unpack there, including how led TI was by — potentially, allegedly, etc — a Deel staffer. Evidence continues, but what’s most wild is how Rippling managed to more concretely pin down that D.S. was allegedly spying. First, the honeypot setup:
And what did D.S. go and do? You already guessed:
And then things got really nuts
Once the honeypot had slammed shut, Rippling went to work:
I hear you. There’s no way that D.S. ran into a bathroom before running out of the building, right? Wrong:
Life is not like the movies. Forget martinis and fast cars, how about cellphones and toilets? I do wonder what it cost to get the plumbing checked.
How Deel’s backers react will prove very telling. The best-case scenario for Deel — provided that Rippling’s allegations are true — is that this was just a few bad apples internally behaving poorly. A worse case would be if the company’s leadership was all in on the gambit. The worst scenario would be provable board knowledge.
More to come, but now you are all caught up!