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> The deal came together in about 12 hours after Rippling went scrambling when it couldn’t get $300 million that was frozen at SVB when it collapsed on Friday,

> The deal came together in about 12 hours after Rippling went scrambling when it couldn’t get $300 million that was frozen at SVB when it collapsed on Friday, according to Rippling co-founder Parker Conrad. Raising $500 million emergency cash after just because they lost access to $300 million doesn’t quite add up. This feels more like another funding round that was maybe pushed forward due to SVB concerns.

lowkey_ 4y ago
During the SVB crisis, Rippling was holding $300M in SVB, much of which was actually Rippling customers’ money that had been stored by Rippling for March 15th payroll. I’m no lawyer, but when Rippling started emailing me “hey, your payroll money is actually with SVB and we need you to contact your bank to try and reverse the payment,” my first thought was “isn’t it your job to make sure my payroll safely reaches my employees?” I imagine they had to make sure all their customers were made whole and quickly even if SVB money wasn’t able to be recovered, and then decided it would be a good plan to always have more than enough cash to cover the payroll they’re holding for customers.
- ucm_edge 4y ago
  At my company they still initially failed to make payroll. Eventually around 6 pm Pacific on the 15th the direct deposits started landing for most people. Although not everyone. I think they did it via some kind of one off point process since I didn’t get an email and the Rippling web app didn’t show me as paid until midday on the 16th. Normally those occur at the same time I see the direct deposit hit. Very unhappy with Rippling here and will advocate my company change processors. They initially acted as if they would cut over to JPMorgan and be fully up on Monday, but as time goes on it becomes clear they had to do a lot more than just change the account they staged payroll through. They also failed to have a secondary banking relationship in place, credit revolvers or other contingencies that let them handle this in house, etc. In 30 years of getting paid and working through times like 2008 when major disruption to banking and credit availability occurred, to me Rippling stands alone as the only company that failed to run payroll on time and it took a single point of failure to make them fall.
  - RileyJames 4y ago
    I mean, the bank failed on Friday. They managed to get payroll out delayed a few days. It was a fast moving situation for everyone involved. Being told that JPMorgan is taking over the deposit, and knowing your payroll payment automations are going to work a different things. I imagine they had to test, and likely rewrite them. Wiring $300M of pay checks as a “we’ll do it live” scenario seems unwise. You’ve every right to be upset. But how long do you think it would take another payroll provider to recover after losing all funds due to their bank going under? 2-3 days seems pretty impressive.
    - travisjungroth 4y ago
      If it's the 16th that's 4 business days. But I agree, going through all the trouble of switching payment processors because you hope if the bank they're using fails they'll get back up and running in less than 4 days is a horrible ROI.
      - ucm_edge 4y ago
        Most payroll process have relations with multiple banks. They have emergency credit revolvers in place. They are resilient to single point of failure. Rippling has shown it not.
        travisjungroth 4y ago
        The bank died with payroll in flight. If they had alternates it would have been faster, but like Monday or Tuesday. 1-2 days instead of 4. No payroll processor could have made payroll on time in this situation. If you overnight a letter from SF to NYC and the plane crashes on landing, the replacement letter is definitely going to be late.
        danenania 4y ago
        Well, everyone supposedly has a plan until they get punched in the nose. I'm skeptical that any payroll provider would be fully resilient to their primary bank failing. They'd need to have a 100% reserve in a secondary account and have instant failover logic in place to update payment flows for all customers. Doesn't sound likely.
m3kw9 4y ago
You need a little cushion and it’s silicone valley, just round it up to a 5

lowkey_ 4y ago

During the SVB crisis, Rippling was holding $300M in SVB, much of which was actually Rippling customers’ money that had been stored by Rippling for March 15th payroll. I’m no lawyer, but when Rippling started emailing me “hey, your payroll money is actually with SVB and we need you to contact your bank to try and reverse the payment,” my first thought was “isn’t it your job to make sure my payroll safely reaches my employees?” I imagine they had to make sure all their customers were made whole and quickly even if SVB money wasn’t able to be recovered, and then decided it would be a good plan to always have more than enough cash to cover the payroll they’re holding for customers.

ucm_edge 4y ago
At my company they still initially failed to make payroll. Eventually around 6 pm Pacific on the 15th the direct deposits started landing for most people. Although not everyone. I think they did it via some kind of one off point process since I didn’t get an email and the Rippling web app didn’t show me as paid until midday on the 16th. Normally those occur at the same time I see the direct deposit hit. Very unhappy with Rippling here and will advocate my company change processors. They initially acted as if they would cut over to JPMorgan and be fully up on Monday, but as time goes on it becomes clear they had to do a lot more than just change the account they staged payroll through. They also failed to have a secondary banking relationship in place, credit revolvers or other contingencies that let them handle this in house, etc. In 30 years of getting paid and working through times like 2008 when major disruption to banking and credit availability occurred, to me Rippling stands alone as the only company that failed to run payroll on time and it took a single point of failure to make them fall.
- RileyJames 4y ago
  I mean, the bank failed on Friday. They managed to get payroll out delayed a few days. It was a fast moving situation for everyone involved. Being told that JPMorgan is taking over the deposit, and knowing your payroll payment automations are going to work a different things. I imagine they had to test, and likely rewrite them. Wiring $300M of pay checks as a “we’ll do it live” scenario seems unwise. You’ve every right to be upset. But how long do you think it would take another payroll provider to recover after losing all funds due to their bank going under? 2-3 days seems pretty impressive.
  - travisjungroth 4y ago
    If it's the 16th that's 4 business days. But I agree, going through all the trouble of switching payment processors because you hope if the bank they're using fails they'll get back up and running in less than 4 days is a horrible ROI.
    - ucm_edge 4y ago
      Most payroll process have relations with multiple banks. They have emergency credit revolvers in place. They are resilient to single point of failure. Rippling has shown it not.
      - travisjungroth 4y ago
        The bank died with payroll in flight. If they had alternates it would have been faster, but like Monday or Tuesday. 1-2 days instead of 4. No payroll processor could have made payroll on time in this situation. If you overnight a letter from SF to NYC and the plane crashes on landing, the replacement letter is definitely going to be late.
      - danenania 4y ago
        Well, everyone supposedly has a plan until they get punched in the nose. I'm skeptical that any payroll provider would be fully resilient to their primary bank failing. They'd need to have a 100% reserve in a secondary account and have instant failover logic in place to update payment flows for all customers. Doesn't sound likely.

m3kw9 4y ago

You need a little cushion and it’s silicone valley, just round it up to a 5