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

At Rippling, co-founder and CEO Parker Conrad keeps a close eye on his fast-growing tech startup. While the company has grown to 1,700 people since turning 60 four years ago, he says he personally handles payroll, employee expenses and corporate card approvals. “I am the sole administrator of our company,” he said Forbes.

How does the busy CEO of a company now valued at $11.3 billion do it? With Finance Cloud, a new offering Rippling is adding to its HR feature set. It’s the third leg of the company’s stool, as Conrad puts it, after its HR and IT offerings. By unifying these different types of employee data into one software, Conrad hopes to provide a viable all-in-one solution for corporate services that are often managed 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?’ [other companies’] products?’ My answer is no,” Conrad said Forbes. “I think because these products share a set of capabilities, what we’re building is really superior to the point solutions on the market.”

The new product brings Rippling another step closer to organizing and connecting the disparate employee data it collects, from personal information to apps installed on an employee’s laptop, much like Salesforce has unified customer relationship information. Conrad sees this as a huge 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 that Salesforce manages.

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 insights that wouldn’t be available if the data were hosted in different products . For example, Rippling can automatically reject employee attempts to purchase Microsoft Office if the company prefers that they use Google’s Workspace. You can create a unique corporate credit card for remote employees who plan to fly to company headquarters for a holiday party. For someone like Conrad who tracks all expenses, the software can automatically approve expenses based on HR data, such as how long they’ve worked at a company. It could also flag an employee’s expenses that were particularly high compared to their peers.

With its new offering, Rippling is challenging both corporate charter startups like Brex (last valued at $12.3 billion) and more established fintechs like accounting firm Bill.com (market cap $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 do,” Conrad said.

Conrad won’t yet forecast revenue for the new product — flawed revenue projections were one factor in the escalating dust-up that led to his ouster from Zenefits — but he predicts that over time, it will bring in as much money as Rippling HR and IT. products Conrad said the company generated more than $100 million in annual recurring revenue in May Forbes at the time.

So what’s next for Rippling? The startup may have a fourth leg to add to its stool, though Conrad is tight-lipped about what that might be. First, Rippling must prove that it can outperform multiple unicorn rivals in a competitive space. “The big question is: Fundamentally, does this approach work?” explained. But trust that it will be so. He sees the diverse landscape of cloud computing as a byproduct of a haphazard migration of data from physical servers to various task-specific cloud offerings. And he’s betting that as the industry matures, companies 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 the wave of consolidation could gobble up companies worth billions of dollars.

“I think the trend will move in a different direction from 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 will be Salesforce, Rippling and maybe one or two others.”