Breakout Startups #14- Rippling
The company building the OS for Employee Management
If you join a company, my general advice is to join a company on a breakout trajectory.” — Sam Altman, Former President at Y Combinator
In this 14th Edition of Breakout Startups Memos, we are profiling Rippling, the company making it unbelievably easy to manage your team’s payroll, benefits, computers, and apps — all in one, modern platform.
What is Rippling?
Rippling is an employee management system that works across the company and syncs with more than 500 applications out there.
Rippling can automatically add employees to Gmail distribution lists, Slack channels, Box folders, GitHub repos and other apps, manage passwords and sign-on, and cut off access when people leave the company.
In the investment memo written by Founder and CEO Parker Conrad the company identifies itself as a hybrid of these three software categories:-
- An all-in-one payroll, benefits, and HRIS system
- An “identity” / access management system
- An endpoint device management system
Rippling is aiming to bundle all the not-so-sexy tools a company uses to manage all the aspects of the relationship between a company and its employee.
Motivation
After leaving his previous startup Zenefits, Conrad wasted no time and immediately started working on Rippling.
The product is a solution to all the problems he saw while building Zenefits which was a complete, mobile HR experience for small and medium businesses. The company was embroiled in a controversy which led to Parker’s exit but got into the market quickly and raised a seed round from Initialized Capital and a bunch of angel investors to start working on
On his LinkedIn Profile, Conrad writes about his mission with Rippling,
Our Mission is simple: To eliminate the administrative drudgery of running a business by creating a single system of record for employee information that all business software and services plug into.
Team
Rippling’s team is one of the most impressive out there with Parker Conrad at the helm of affairs.
- Parker Conrad- Founder and CEO, Rippling. Ex- Founder and CEO, Zenefits. One of the most product centric CEOs in Silicon Valley.
- Prasanna Sankar- Co-Founder and CTO, Rippling, Ex- Microsoft, Zenefits
- Matt MacInnis- COO, Rippling, Ex- Apple, Harvard
Funding
- Rippling is valued at $270M and has raised $52M in financing to date.
- The company recently raised a Series A round of $45M led by Kleiner Perkins.
- The company is backed by marquee investors including Initialized Capital, Y Combinator, SV Angel and others.
Market Landscape
Rippling identifies as a complete Employee Management System, rather than a simple HR Tool.
.In the competition section of investment memo, Parker Conrad writes, that they are competing against not a single company but different companies across different verticals.
- On the payroll and HR side, Rippling competes against Gusto, Zenefits, Namely, ADP, Paychex, and other similar companies.
- On the identity side, Rippling competes against Okta, OneLogin, LastPass, OnePassword, and amongst other companies.
- On the device management side, Rippling competes against JAMF (for mac), Microsoft (for PC management) and other smaller, competitors.
Rippling bundles these three segments together in its product and it clearly seems to be working. Conrad notes that the company is is currently achieving 20% month-to-month growth, and that rate is accelerating. The memo mentions that the time it takes to double the revenue recently dropped from 4 months to 3 months.
Along with the rapid growth, the company is also focused on client satisfaction. In the memo, the company notes that the NPS of the product is poised at 66 which is very high.
What’s next for Rippling?
The company is going through a rapid growth phase right now and is well beyond product market fit.
Going ahead, the company can not only strengthen its foothold in the current areas, but also explore other sectors. As noted by CBInsights, Human Resources and Employee Management is one of the most crowded spaces to be involved in.
One potential opportunity can be that Rippling can pilot new tools on top of its fast growing user base which will help companies manage their employees better thus increasing the market scope for the product.
Interesting Points
- Rippling is a competitor to Parker Conrad’s previous company Zenefits.
- To raise the company’s next round of financing, instead of building a pitch deck, Parker wrote a memo which highlighted the core features of the product along with the NPS, SaaS Magic Number and other essential metrics which helped them close the fundraise.
3. Parker Conrad has one of the most impressive founder stories. He graduated from Harvard after flunking out, beat testicular cancer at 24, and was pushed out of his previous startup, SigFig, by his own co-founder. After this he went on to start a behemoth Zenefits and is now working on Rippling.
