At Rippling, co-founder and CEO Parker Conrad keeps a close eye on his growing tech startup. Although the company has 1,700 people compared to 60 four years ago, he says he personally handles payroll, employee expenses and company card approvals. “I am the sole director of our company,” he said. Forbes.
How does the busy CEO of an $11.3 billion company fare? With Finance Cloud, a new offering that Rippling is adding to its suite of HR features. It’s the third leg of the company’s stool, as Conrad puts it, after its HR and IT offerings. By unifying these disparate types of employee data under one piece of software, Conrad hopes to offer a viable all-in-one solution for enterprise services that are often managed by multiple vendors.
“When people are skeptical like, ‘If you’re building a lot of products, aren’t you building shittier versions of a lot of [other companies’] some products?’ My answer is no,” Conrad said. Forbes. “I think because these products share a set of features, what we’re building is actually superior to point solutions on the market.”
The new product brings Rippling even closer to organizing and connecting the disparate employee data it collects, from personal information to apps installed on an employee’s laptop, similarly to the CRM giant. Salesforce has unified customer relationship information. Conrad sees this as a huge opportunity. He believes that the scope of employee data “is at least as great, and perhaps even much greater than” the sales, marketing and customer relationship data managed by Salesforce.
Conrad’s thesis is that by connecting traditional HR and IT tools like payroll and device management with the financial side of the business, customers can save time and unlock information that would not be available if data was hosted in different products. For example, Rippling can automatically decline employees’ attempts to purchase Microsoft Office if the company prefers them to use Google Workspace instead. It can create a unique corporate credit card for remote employees who plan to travel to corporate headquarters for a holiday party. For someone like Conrad who tracks every expense, the software can automatically approve expenses based on HR data, like how long they’ve worked at a company. It could also signal an employee’s expenses that were particularly high compared to their colleagues.
With its new offering, Rippling is challenging both hot corporate card startups like Brex (latest valuation of $12.3 billion) and more established fintechs like accounting firm Bill.com (market cap of $15 .1 billion) and expense manager Expensify ($1.2 billion). “I think the difference between us and these other companies is that most of them don’t have the depth of understanding of employee data that our own native products will have,” Conrad said.
Conrad doesn’t yet forecast revenue for the new product – flawed revenue projections were one of the factors in the acrimonious dust that led to his ousting from Zenefits – but predicts that over time it will bring in as much money than Rippling’s human and IT resources produce. The company was generating north of $100 million in annual recurring revenue as of May, Conrad said. Forbes at the time.
So what’s next for Rippling? The startup may well have a fourth leg to add to its stool, though Conrad is suspicious as to what that might be. First, Rippling must prove he can outperform several unicorn rivals in a competitive space. “The big question is: fundamentally, does this approach work?” he explained. But he is confident that it will. He sees the diverse cloud computing landscape as a byproduct of a random migration of data from physical servers to various task-specific cloud offerings. And he’s betting that as the industry matures, convenience-seeking companies will naturally focus their spending around a small handful of companies, just like they did with enterprise software in the years. 1990. His reasoning is echoed by some cloud VCs, who predict that the wave of consolidation could swallow up companies worth billions of dollars.
“I think the trend is going to go the other way from what it was before with a small number of monolithic software vendors like SAP, Microsoft and Oracle,” Conrad said. “In the cloud, I think it will be Salesforce, Rippling and maybe one or two others.”