- Earlier this week, Parker Conrad, CEO and cofounder of hot startup Rippling, announced that the company had raised $145 million in a Series B round led by Founders Fund.
- Rippling helps small businesses manage employee benefits and other needs.
- Notably, Rippling competes with Zenefits — the human resources startup that Conrad founded, but then left suddenly four years ago amid allegations that he misled investors.
- “The view of Rippling is that you want to do much more than just all-in-one HR,” he told Business Insider. “You want a system that cuts across every functional area of the entire company. So that employees get set up and managed everywhere.”
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Entrepreneur Parker Conrad, CEO and cofounder of Rippling, clearly sees a huge business opportunity in offering small businesses an easy way to track and manage the needs of their employees.
That’s what he sought out to do at Zenefits, the fast-growing cloud platform he cofounded and led as CEO, before being suddenly and unceremoniously leaving the company amid allegations that he misled investors and violated SEC rules, and a scandal over the company’s compliance with insurance regulatory standards.
But Conrad is back, taking aim at the market for small business human resources management software where Rippling, which he launched in 2016, has become a new major player.
This was underscored this week when Rippling announced that it has raised $145 million in a Series B round led by Founders Fund, boosting the startup’s total investments to $197 million at an estimated valuation of $1.35 billion.
Conrad said he and cofounder Prasanna Sankar sought out to build a platform that could automate as many HR-related processes as possible.
“Prasanna and I started Rippling four years ago because we felt we’d discovered a secret hidden in plain sight,” he said in a blog post announcing the funding. “We’d both previously led startups that drowned in back office busywork, and we believed the source of nearly all of it was the need to manually update employee information in dozens of different business systems every time someone joins a company, gets a raise, or needs access to a new app.”
The market for cloud HR tools geared to small and medium-sized businesses is becoming a crowded and competitive space, but Conrad argues that Rippling, which has 250 employees and several thousand customers, offers even more features and services than rivals, including Zenefits and Gusto.
“Zenefits really was the first company to do all-in-one HR, and then Gusto kind of moved into that space as well,” he told Business Insider.
A bigger vision than before
Rippling goes beyond onboarding and HR processes, and helps employees become integrated into other key areas of their company, including the tools you would need, he said.
In fact, Rippling is competing in a bigger market, taking on Paylocity and Gusto in human resources software, and with Oktaand OneLoginin identity management, the company said.
“The view of Rippling is that you want to do much more than just all-in-one HR,” Conrad said. “You want a system that cuts across every functional area of the entire company. So that employees get set up and managed everywhere.”
This has become a critical need for Rippling’s customers, small businesses, which bore the brunt of the economic downturn triggered by the coronavirus crisis.
“Certainly, some of our customers have been hit really hard by this,” he said. “We have not been unaffected,” but he said, adding, “We cut our marketing budget in half in March, because we were nervous about what could happen.”
But he said Rippling has managed to continue growing despite the downturn.
“We’ve had, you know, our three best sales months ever in the last three months,” he said. “We’re scheduling more demos and pulling in more customers every month than we ever were before.”
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