Rippling Private Stock Valuation and Market Context

Month in Review & Stock Spotlight

September 8, 2023

Hill Chart Shape

Before getting into granular context of Rippling and the most active names in the private market, ApeVue explores the key sector benchmarks in 2023.

ApeVue50 Index & Sectors YTD Performance (% year-to-date)

Returns for Private Markets (%YTD to 04-Sep-23):

Data = +18.90%

Entertainment = +10.43%

Financial = +6.80%

ApeVue50 = +3.75%

SaaS = -0.08%

Security = -15.58%

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ApeVue50's performance strengthened this past week, with other major Sectors mainly flat or up. Unsurprisingly, Data sector continues on its steady upward trajectory since late May and is up close to 10% YTD, driven largely by AI adjacent Databricks, Scale AI &, interestingly, Rubrik (focusing on data protection), with latter likely to be the result of impending IPO rumours.

Finance also similarly close to 10% up for the year, but with a lot more volatility, driven to some degree by the neo-banks. Interestingly, the broad SaaS sector is now back to being even for the year, in what appears to be yet another sign of returning investor interest in the secondary markets.  

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Most Active Names Performance

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ApeVue50 Privates versus Public Benchmarks/ETFs

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Public v. Private (12mo)

The ApeVue50 tracks the performance of the 50 most active private names observed in the secondary market. It is an equal-weighted index, rebalanced on a monthly basis.

This rebalancing of constituents over time gives way for more active names to participate in what we observe as "market performance," and in a more appropriate manner than static selections and weightings criteria.

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Sectors

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‍Stock Spotlight - Rippling

Opening up further details around Rippling along with its IPO prospects and valuations to date, we explore the stock in the context of funding rounds and secondary market activity in between such rounds...the last of which was as far back as May of 2022.

What is Rippling at a glance?

Achievements and Expansion

⭑ Won TrustRadius' 2022 Best Value Award for HR Management.

⭑ Human Resource Executive has named Rippling Global Workforce Management a Top HR Product of the Year.

⭑ Recent international expansion to Ireland.

Rippling Market Positioning

⭑ Manage all of your global HR, IT, and Finance in one modern platform.

⭑ Fully onboard new contractors and employees around the world in just 90 seconds.

⭑ Integrate with over 500 third-party apps like Slack, Office 365, T Sheets, and Quickbooks.

⭑ Save 70+ hours per month on manual administrative work.

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Following the fallout with SVB, there was a major and direct impact at Rippling:

⭑ Immediate Impact: $130 million of Rippling clients’ funds were frozen in a SVB account.

...An additional $415 million of frozen funds was supposed to cover paychecks by the middle of the following week¹.

Only about 70 percent of the $545 million total was insured under rules set by the FDIC.

⭑ Rippling's Response: Rippling utilized $130 million of their own funds and raised an emergency $500 million from investors, including Greenoaks, to ensure paychecks continued.

⭑ Future Precautions: Rippling is now partnering with large institutions like JPMorgan Chase to prevent similar incidents in the future.

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With regards to competition, Rippling is on a strong footing with a similar valuation to Deel, and range-bound between the market caps of Paycor and Paycom. This will be an exciting name to watch in the coming months, particularly thanks to the stronger buying demand ApeVue is observing.

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