Rypple Raises $7M to Disrupt the HR Business

Rypple, which wants to free the enterprise world from “HR software that sucks,” has closed a $7-million funding round from Bridgescale Partners, which the two-year-old startup plans to use to expand its new San Francisco office and ramp up its word-of-mouth marketing. Bridgescale partner Howard Gwin, a former senior executive with PeopleSoft, is joining the company’s board. Rypple has raised a total of $13 million to date, with previous rounds coming from Facebook investor Peter Thiel and Extreme Venture Partners.

Founder and co-CEO Daniel Debow says that Rypple was designed to make it easier for companies to get useful feedback from within their organizations, because most traditional HR software and the process of bi-annual performance reviews don’t actually get the information that matters to those who need it. “Employees and managers are fed up with HR software that sucks,” he said in an interview Wednesday. “They don’t want top-down, command-and-control-based performance software that is focused on process and filling out forms. What they want is frequent, useful feedback to do their jobs better.”

Debow says Rypple has tried to take the same approach to human resources software for managers that consumer software and services such as Twitter and Facebook have taken, which is to build a lightweight, web-based service that is easy to use and makes use of social behavior that people — particularly younger employees from Generation Y — are already engaging in online. So instead of being a huge piece of cumbersome software that managers have to use once or twice a year to do traditional performance reviews, Rypple allows them to provide continuous feedback to employees, and vice versa. There’s even an iPhone (s aapl) app.

Just as someone might review a restaurant on Yelp, for example, a manager or an employee can provide a review of someone and tag it or attach it to a team goal, and users of any kind can provide recommendations and recognition for tasks that have been accomplished, including badges for performance. The software tracks all of this activity, says Debow, so that when a manager has to pull together information at the end of the year or at bonus time, it’s easy to see a record of their interactions with each employee, rather than having to spend hours combing through their email for the annual performance review.

[inline-pro-content] “It’s an open secret that most companies hate the HR software they use, but they feel like they have to use it,” the Rypple founder said in an interview. “We’re trying to provide a better way for managers and employees to provide continuous feedback in a really easy, lightweight fashion.” The company has grown mostly through word-of-mouth so far, Debow says, and has thousands of corporate customers large and small in dozens of countries around the world — including technology leaders such as Mozilla, Rackspace (s rax), Adaptive Path and Digg.

The former head of human resources at Mozilla liked the product so much he joined the company, Debow says, and Rypple has also added the former head of community at Ning.com to its San Francisco office.


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