(Bloomberg) — Deel, the human resources startup valued by venture capital investors at $12 billion, has lost its head of communications as the company finds itself embroiled in a corporate espionage scandal implicating its chief executive officer.
Elisabeth Diana, the company’s communications chief since 2021, resigned from her position last week, according to a person familiar with the matter who asked not to be identified discussing private information. She had previously served as the head of communications for Instagram and as a vice president at Meta Platforms Inc., then called Facebook.
Diana declined to comment. A representative for Deel said, “We are grateful for the work Elisabeth did while at Deel and wish her the best in her next endeavor.”
Deel has been locked in an escalating legal battle with competitor Rippling, the business software startup run by Parker Conrad currently in talks for a $16 billion valuation.
Last month, Rippling sued Deel, alleging that it paid a Rippling employee to spy on the company — and that, when confronted, the accused spy locked himself in a bathroom and eventually fled the building. In a statement, Deel called the charges “baseless.”
The drama intensified earlier this week, when a former Rippling employee named Keith O’Brien said in an affidavit filed with Ireland’s High Court that Deel Chief Executive Officer Alex Bouaziz had asked him to spy on Rippling. O’Brien said that the CEO recruited him to the the espionage effort with comparisons to James Bond, and that he was paid about $6,000 a month to share Rippling company secrets.
O’Brien said he spoke with Bouaziz multiple times a day, and that when Rippling discovered his identity, Bouaziz encouraged him to flee with his family to Dubai. O’Brien also said that in an effort to cover up evidence of espionage on the advice of Deel’s legal director, he smashed his phone with an ax and disposed of the pieces down the drain at his mother-in-law’s house.
In a statement, a spokesperson for Deel said that the company was preparing to refute the allegations from O’Brien and Rippling. “It is clear from Rippling’s yearslong history of coordinated legal, political and PR smear campaigns, that their business approach is driven by litigation versus strategy,” the spokesperson said. “Deel looks forward to its day in court, at which time the allegations made by Rippling and O’Brien will be shown to be baseless.”
In a statement, Rippling legal counsel Alex Spiro said, “What Deel did is so brazen and clear they now have to turn on their own spy.”
Until recently, Diana had publicly defended Deel in her capacity as communications director. That included pushing back against a separate civil suit that alleged the platform enabled money laundering. “The complaint is completely baseless,” she wrote on X in January. Deel filed to dismiss the allegations.
Deel’s investors, including General Catalyst, Andreessen Horowitz and Coatue Management, did not respond to requests for comment.
Rippling, amid the legal tussle, is planning to raise hundreds of millions in a new funding round that is still in its early stages, Bloomberg reported. Rippling is backed by VC firms including Kleiner Perkins and Greenoaks Capital.
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