With Finance Cloud, Rippling Hopes To Become The Salesforce Of Employee Data

At Rippling, cofounder and CEO Parker Conrad keeps a close eye on his rapidly-growing tech startup. Although the company has grown to 1,700 people from 60 four years ago, he claims he personally manages payroll, employee expenses, and corporate card approvals. “I’m the only admin for our company,” he told Forbes.

How does the busy CEO of a company now valued at $11.3 billion pull that off? With Finance Cloud, a new offering 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 a single piece of software, Conrad hopes to offer a viable all-in-one solution for corporate services often handled by multiple vendors.

“When people are skeptical like, ‘If you build a lot of products, aren’t you just building shittier versions of a lot of [other companies’] products?’ My answer is no,” Conrad told Forbes. “I think that because these products share a set of capabilities, what we’re building is actually superior to the point solutions on the market.”

The new product brings Rippling another step closer to arranging and connecting the disparate employee data it amasses, from personal information to the apps installed on an employee’s laptop, in the same way CRM behemoth Salesforce has unified customer relationship information. Conrad sees this as a massive opportunity. He believes the scope of employee data “is at least as large, and maybe even much larger than” the sales, marketing and customer relationship data Salesforce manages.

Conrad’s thesis is that by connecting traditional HR and IT tools like payroll and device management with the financial component of the business, customers are able to save time and unlock insights that would be unavailable were the data to be housed in different products. For example, Rippling can automatically decline employees’ attempts to purchase Microsoft Office if the company prefers that they use Google’s Workspace instead. It can create a one-off corporate credit card for remote employees who plan to fly into a company’s 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 might also flag the expenses of an employee that were especially high compared to their colleagues.

With its new offering, Rippling is challenging both buzzy corporate card startups like Brex (last valued at $12.3 billion) and more established fintechs like bookkeeping company Bill.com (market capitalization of $15.1 billion) and expense manager Expensify ($1.2 billion). “I think that the difference between us and these other businesses is that most of them don’t have the depth of understanding of employee data that our own native products will,” Conrad said.

Conrad won’t yet forecast revenue for the new product—faulty revenue projections were one factor in the acrimonious dust-up that led to his ouster from Zenefits—but anticipates that in time, it will bring in as much money as Rippling’s HR and IT products. The company was generating north of $100 million in annual recurring revenue in May, Conrad told Forbes at the time.

So what’s next for Rippling? The startup may well have a fourth leg to add to its stool, although Conrad is cagey about what it might be. First, Rippling needs to prove it can outmuscle multiple unicorn rivals in a competitive space. “The big question is: fundamentally, does this approach work?” he explained. But he’s confident it will. He sees the diverse cloud computing landscape as a byproduct of a haphazard migration of data away from physical servers to various task-specific cloud offerings. And he’s betting that as the industry matures businesses looking for convenience will naturally concentrate their spending around a small handful of companies just as they did with enterprise software in the 1990s. His line of reasoning is echoed by some cloud VCs, who predict that the consolidation wave could gobble up companies worth billions of dollars.

“I think the trend will move in the other direction to the way it used to be with a small number of monolithic software vendors like SAP, Microsoft and Oracle,” Conrad said. “In the cloud, I think it’s going to be Salesforce, Rippling and maybe one or two others.”

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