Rippling: The Rebundling of Enterprise Software

Today, we are excited to announce that Sequoia Capital Global Equities and Global Growth have led the Series C in Rippling. While Rippling is only five years old, this is a journey that is more than two decades in the making.

The journey began in two ways. First, I was lucky enough to be classmates with both Parker Conrad (co-founder & CEO) and Matt MacInnis (COO) twenty years ago. Second — and equally important — I spent the early years of my career at Microsoft.

One of Microsoft’s fundamental strategies was to build products that worked seamlessly together. Whether it was Windows, Office or Visual Studio, enterprise buyers had a one-stop shop for software products that worked well alone, but worked even better together.

A critical but under-appreciated linchpin of Microsoft’s technical stack was Active Directory. Active Directory was Microsoft’s enterprise identity system that stored basic information about an organization’s employees and enabled everything from auto-complete of email addresses in Outlook to the sharing of network files and folders.

Netscape CEO James Barksdale once famously observed that tech tends to oscillate between waves of bundling and unbundling. During the early part of a disruption cycle, new companies tend to build narrow, “best of breed” solutions that compete with incumbents. As the market matures, these solutions tend to be bundled back together.

As enterprise software has moved to the cloud, we have seen a massive unbundling of products into ever smaller point solutions. Many startups and small businesses have more SaaS subscriptions than employees.

While each tool might be individually great, this setup introduces a tremendous amount of administrative complexity. Data is fragmented across many different systems, each with bespoke connectors to dozens of other systems. Managing your business and getting a simple, holistic view of how you’re doing becomes incredibly difficult.

Enter Rippling. Rippling’s success is rooted in two core insights. First, most enterprise software is fundamentally about employees doing work — it helps salespeople sell, marketers market, or engineers build. Second, most of that software duplicates a common set of features. Mature SaaS product ends up implementing reports, dashboards, alerts, workflows, user authentication and the like — each with a bespoke, inconsistent approach.

Rippling is underpinned by an employee graph that unifies both IT-style identity management and traditional HRIS/payroll systems. Where Active Directory historically offered a simple list of employees and groups, Rippling provides a rich graph of data about the organization, employees, their devices and apps that can be used across the entire platform.

On top of that, Rippling has built a robust application platform that enables the fast development of both first- and third-party applications. Unlike most companies at this stage, Rippling already has over 10 distinct product lines that are each individually at a $1M+ ARR run-rate.

As with the Microsoft of the past, each product works well on its own, but even better together. The shared data model and the shared platform enables rich integration across all of the applications. This strategy is working — the customers we spoke with love the product, with Rippling boasting a 4.9/5.0 rating on both G2 and Capterra.

Rippling is one of the fastest-growing companies we have seen in the past few years. Today, they have more than 20 different first-party applications on their platform and distribute many more. Over time, we see a world where Rippling becomes the one-stop shop for both SMBs and larger organizations to manage their employees, applications and devices all in one place.

We believe we are at an inflection point on the bundling/unbundling curve — especially for SMBs. We are excited to work with Parker and the team to simplify the lives of millions of entrepreneurs and business owners. To learn more, check out rippling.com or rippling.com/careers.