Pulse News

**The Bitter Fintech Feud That Stretches From Silicon Valley to Moscow**

Deel and Rippling have stirred up a hornets' nest in the staid world of HR and payments software.

By Michael Roddan and Cory Weinberg

Feb 27, 2025, 6:00am PST

The seemingly mundane world of human resources management startups is not the place you'd expect to see cutthroat corporate blood sport, battles linked to global geopolitics, and questions about whether companies took on the wrong customers to boost growth. But Deel and Rippling are hardly ordinary startups.

Their feud spilled into open view earlier this year in a Florida courtroom. A court-appointed receiver to a fraudulent investment scheme accused Deel in a complaint of becoming a magnet for people moving money into Russia and making it easy for "bad actors" to "do business with our nation's enemies in violation of national sanctions."

**The Takeaway**

- Deel and Rippling are trading jabs over payments in Russia.

- Rival fintechs are both under pressure from partners over sanctions risks.

- Feud spills out into the open in a tight race to disrupt the HR and payments markets.

Deel immediately pointed the finger at Rippling, calling the accusation a "coordinated effort" by Rippling to damage the reputation of its main competitor. Deel applied to dismiss the case. Deel's evidence was that the receiver's attorney was an investor in Rippling and represented it in licensing and regulatory matters, including helping it set up its insurance brokerage. Rippling's general counsel, Vanessa Wu, confirmed that the lawyer held those roles. But she shot back at Deel. "Placing blame on us is a deflection strategy," Wu said in messages to Rippling staff viewed by The Information. "Everything cited in the complaint was Deel's own compliance record (or lack thereof)," she said. "But ultimately, this stuff catches up with you, and [it] seems wiser for them to focus on what appear to be serious issues."

Deel had in fact been having issues around payments made to people in Russia. JPMorgan Chase and London-based stablecoin startup BVNK, two firms that facilitate payments for Deel, had probed Deel transactions for clients and contractors based in Russia and other jurisdictions, according to internal documents and correspondence, as well as interviews with former Deel employees and people who have worked with Deel's banks and payments facilitators. JPMorgan and BVNK said Deel could be violating their own rules, which prohibit them from doing business in certain places, including those under sanctions. Deel had publicly distanced itself from facilitating transactions in Russia but had been helping Russian customers find workarounds to the financial roadblocks of its payments providers, according to the internal documents and interviews.

At the same time, Rippling was grappling with its own exposure to Russia and transactions in areas prohibited by its payments provider, which was also JPMorgan, according to internal Rippling correspondence and records of the company's interactions with the bank.

JPMorgan froze payments by Rippling to sanctioned banks, including Sberbank, after Rippling discovered it had failed to properly maintain a system blocking payments to the Russian institution, according to internal correspondence. Rippling also late last year scrambled to delete material from its website that encouraged customers to use its payment systems if they wanted to send money to Russian contractors, internal correspondence shows.

**'Selling Snake Oil'**

The two companies have aggressive, competitive cultures, reflecting their founders' attitudes. Deel was co-founded by Alex Bouaziz, who navigated a thicket of international laws to help tech firms hire software engineers around the world. Just six years after its founding, Deel is making $800 million in annualized revenue from operations in 150 countries.

Rippling was co-founded by Parker Conrad after he was forced out of the prior company he started, Zenefits. He left amid a compliance scandal that involved employees selling insurance without proper licenses and a computer program he allegedly created that helped Zenefits employees cheat on online broker courses. The Securities and Exchange Commission fined Conrad over the matter. He neither admitted nor denied the SEC's findings. He has said he was ousted from the company in part by Zenefits investor Andreessen Horowitz, which later became the biggest shareholder in Deel.

Rippling has been a success under Conrad, who is so competitive he once banned employees who left for rival firms, including Deel, from selling their Rippling shares in tender offers. Since its founding in 2016, Rippling has expanded its payroll products to 185 countries.

The two companies are neck and neck in their race to disrupt the HR and payroll markets, which have been dominated for years by SAP Concur and ADP. Last year Rippling was valued at $13.5 billion—against Deel's $12.6 billion valuation in February. And last fall, Rippling expected to have $580 million in annual recurring revenue by the end of 2024, The Information reported.

**Separate Checks**

Comparing global payroll platforms Deel and Rippling

| Metric | Deel | Rippling |

|--------------------|-----------|------------|

| Valuation | $12.6B | $13.5B |

| Revenue (2024) | $800M | $580M |

| Total Raised | $685M | $1.4B |

| Employees | ~5,000 | ~3,000 |

| Payroll available in | 160+ countries | 185+ countries |

The two companies were already in a playground brawl before the courtroom drama last month. Deel at one point posted a comparison between the two firms on its website. Rippling wasn't pleased. In December, Rippling launched a version of the classic snake video game that purported to educate consumers about "misleading" claims made by Deel. When it launched the game, Rippling's official X account tweeted that Deel was "selling snake oil." Deel's head of sales allegedly used the game's chatbot feature to write "Suck a 8====D" in the form, according to a post on social media.

Logan Bartlett, a software-focused venture capitalist at Redpoint Ventures, attributed some of the intensity of the rivalry to "culture and personality differences" between the two companies and their founders. He added that as long as the rivalry existed, neither company could dominate the industry. "Both of them are in the way of the other for the dream they think is possible," said Bartlett, who is friendly with Conrad but whose firm hasn't invested in either startup. One former Deel employee put it another way: "They're both trying to eat the whole world."

**Deel Speed**

The fast-paced global expansion strategy pursued by the two firms has sometimes put them at odds with the banks and payments firms they rely on to connect employers to their contractors. This came to a head in Russia. The companies' clients were hiring the abundant technical talent available there. In many cases, paying Russian contractors is legal, but it's risky because the money can't touch most Russian banks. More than 80% of Russian banks have been under U.S.-imposed sanctions since Russia's invasion of Ukraine three years ago, and the rules can change quickly. Because of that risk, many financial institutions stopped all transfers to Russia.

Deel and Rippling were stuck between serving clients to grow their businesses and potentially running afoul of rules set by their payments partners, which could hit their operations. Deel late last year responded to its payments partners' concerns by adding tools to better track where money was going and to whom, even as it continued to offer options for clients to make payments in Russia—unlike Rippling.

In October, JPMorgan asked Deel about payments the bank had made for Deel that sent money to an independent contractor in Russia, according to Deel's internal records of correspondence with the bank. JPMorgan froze the payment because it breached the bank's rules banning transaction flows into Russia, according to people briefed on the transaction. Around the same time, BVNK peppered Deel with requests for information about payments it suspected of breaching its own rules about where transactions could be processed. Using an IP address monitoring tool, BVNK probed dozens of transactions where it suspected Deel might have been attempting to pay contractors in areas BVNK prohibits, including potentially sanctioned regions of Ukraine or in Russia, according to records of correspondence between the two firms.

"Deel's response to BVNK's routine compliance information requests have been consistently swift and iterative, which has allowed both parties to operate with confidence and integrity," a spokesperson for BVNK said. BVNK hasn't had a sanctions breach or faced government scrutiny over the issue, the spokesperson said.

Like Deel, Rippling had courted companies that wanted to pay Russian contractors. A page that previously appeared on Rippling's website "How to pay contractors in Russia" told clients to use its global payroll software to process payments for Russian contractors as a way to overcome the "challenging" political climate. Rippling had also encountered questions from its banking partner about payments destined for Russia. In March 2024, JPMorgan froze two Rippling payments to a contractor based in Moscow who held an account at a sanctioned Russian bank, according to records of the payment. According to the internal slack messages, the payments slipped through Rippling's compliance systems due to a coding error in a system intended to block payments to the Russian bank. Rippling fixed the error and escalated the issue to leadership, a person familiar with the matter said.

Deel announced last May it would no longer pay contractors who held Russian bank accounts, according to an archived version of a page on Deel's website, which was deleted last month. Rippling began to consider changes to its service for Russian contractors starting in July and banned transactions entirely in October. Russian payments were a small part of both companies' businesses, though Deel, with a more international focus, did more business in the country.

In October, information about making payments to Russian contractors was still available on Rippling's website. That month, a marketing employee asked engineering employees to "take this post down ASAP" as the team was "being asked to take down most Russia stuff." According to recent correspondence sent to clients, Deel has continued to offer several methods for sending money to Russian contractors using its platform. Enterprise startup Tinybird, for example, approached Deel seeking a way to pay a newly hired contractor based in Russia, according to records of correspondence between the two firms.

Deel gave Tinybird a range of options for sending money to Russian contractors on the Deel platform, such as crypto wallets and other digital payments, including from payments firms Payoneer and Revolut. Payoneer said it prohibited payments to Russia, while Revolut declined to comment. Deel's instructions also recommended making payments to Russia via intermediary accounts at a list of 14 foreign banks in Kazakhstan, Kyrgyzstan, Georgia, and Armenia, which send the payments to contractor customer accounts at Russian banks.

**Deeling with Russia**

Tinybird also followed instructions currently hosted on the website of a sanctioned Russian bank that guided companies on how to skirt sanctions rules by using Deel. The materials recommended using a broker in Armenia to act as an intermediary for the payments. Following inquiries from The Information, Tinybird CEO Jorge Gomez Sancha said the company had "terminated the relevant agreement" it had with the Russian contractor. "Tinybird has also taken steps to investigate the matter and block any future payments that could involve sanctioned banks," Sancha said. A Deel spokesperson said Deel maintained "consistent, collaborative relationships with our banking and payments partners" and hired outside companies to ensure compliance with sanctions laws and regulations.

**Coding Errors**

Rippling's effort to stop payments to Russian contractors didn't always work. The company's internal controls sometimes allowed the payments to be initiated, which Rippling blamed on technical glitches. When Rippling's controls failed to halt the transaction, it would move to JPMorgan, which would process the payments. In September 2024, JPMorgan blocked a Rippling payment to an account held at Sberbank, a sanctioned Russian bank, according to internal slack messages between compliance staff. One of Rippling's compliance staff accidentally overrode a system that would have prevented the transaction from being initiated. Rippling introduced further controls to guard against that happening again, a person familiar with the transaction said. "Rippling has never transmitted payments to any sanctioned country, entity, individual or bank," a Rippling spokesperson said.

It happened again in December, when a coding error allowed a Russian contractor to direct a payment to a sanctioned Russian bank, according to a Slack message from a Rippling compliance officer. "This should NOT have been possible as this bank was added to the SWIFT code control on November 27," the compliance officer said. A person familiar with the blocked payment said the company's compliance control in that instance suffered a coding bug that one of Rippling's overlapping controls caught before the transaction was processed. A Rippling spokesperson said the company was proud of its compliance program. "These messages show that the system works," the spokesperson said. "Due to escalating sanctions, Rippling updated its policies to prohibit all payments to Russia and Belarus and discontinued this payment flow, which resulted in winding this service down for 24 customers representing less than 0.01% of total payment volume."

Michael Roddan is a reporter at The Information based in New York covering banking and financial services. He can be reached at michael@theinformation.com or on Twitter at @michaelroddan. You can also message him on any encrypted app at +1 347 864 0601.

Cory Weinberg is deputy bureau chief responsible for finance coverage at The Information. He covers late-stage private tech firms, IPOs and capital markets, and is based in New York. He has an MBA from Columbia Business School. He can be found on Twitter @coryweinberg. You can reach him on Signal at +1 (561) 818 3915.