
The Scoop
Silicon Valley-based payroll platform Deel has requested a Florida court dismiss charges that it facilitated money laundering transactions, contending the case is actually a hit job from its biggest competitor, likely indicating Rippling.
Earlier this month, court-appointed receiver Melanie Damian filed a class action against Deel, alleging it processed payments without the proper licenses and enabled money laundering related to dealings with former customer Surge Capital Ventures. Surge is part of a separate US Securities and Exchange Commission action alleging a Ponzi scheme that defrauded church members out of $35 million, and Damian is tasked with recovering assets. Though the SEC has not accused Deel of any crime, Damian’s complaint against the company claims it facilitated at least $2.27 million in illegal payment transactions on behalf of Surge, as well as facilitating payments to Russia, violating US sanctions.
In the latest motion to dismiss, the $12-billion Deel denied any wrongdoing and pointed to its biggest competitor, Rippling, calling the lawsuit “a coordinated effort by a major investor in Deel’s primary competitor seeking to tarnish Deel’s stellar reputation.”
While Deel does not name Rippling in the lawsuit, that’s the likely competitor. The plaintiff’s lawyer, Thomas Grady, helped set up Waveling Insurance Services, now known as Rippling, according to documents filed to the Florida Department of State. He was reportedly an investor in the venture.
In a statement emailed to Semafor, a Deel spokesperson said, “Deel has, regrettably, become accustomed to these types of ‘dirty tricks’ — which are set forth by those with the strongest commercial interests and ability to misuse their privileged access to media, our elected officials, and now, the courts, to promote their own agenda at Deel’s expense.” The company ended its relationship with Surge in 2023 and was not involved in its illegal activities, the spokesperson said.
Grady, however, said Deel is pointing fingers. The motion is a “predictable response from a company operating without licenses and hoping to divert attention away from its own conduct,” he told Semafor.
Rippling declined to comment.
Know More
The claims emphasize heightened competition in the small tech space and crowded human resources services market. Rippling and Deel both hold less than a 1% share of the fragmented payroll management market, behind major players like ADP, WorkDay, and Intuit, according to market insights platform 6sense. With Rippling and Deel both specializing in paying global workers, the two have been battling it out for far longer than this lawsuit.