Disclaimer: Nothing presented within this presentation is intended to constitute investment

advice, and under no circumstances should any information provided herein be used or
considered as an offer to sell or a solicitation of an offer to buy an interest in any investment
managed by Sandhill Markets, Inc. (Sandhill Markets). Information provided reflects Sandhill
Markets views as of a time, whereby such views are subject to change at any point and Sandhill
Markets shall not be obligated to provide notice of any change. No assumptions should be made
that investments listed above were or will be profitable. Due to various risks and uncertainties,
actual events, results or the actual experience may differ materially from those reflected or
contemplated in these statements. Nothing contained in this deck may be relied upon as a
guarantee or assurance as to the future success of any particular company. Past performance is
not indicative of future results.
Overview
Rippling is an all-in-one administrative platform founded
by Parker Conrad in 2016. It provides businesses,
LR PPS ~$42.12
especially SMBs, with tools to automate payroll, benefits,
hardware, and software management. By offering payroll LR Valuation $11.25B
services across all 50 U.S. states, comprehensive
employee benefits management, and seamless Vehicle SPV
integration with popular SaaS platforms, Rippling
Share Type Common
positions itself as a unique solution in the HR tech arena.
Share Count 9,523
As of 2022, the company experienced significant growth
and secured notable funding, solidifying its presence in Mgmt / Carry Fees 0/0
the market. Competing with platforms like Gusto and
SPV Fees None
ADP, Rippling stands out by targeting not just HR but also
IT and operations, catering to the multifaceted needs of
growing businesses.
 Product Overview
Rippling acts as a centralized system to manage employee data, simplifying
administrative tasks when an employee's role changes or new members
join. Instead of manually updating multiple systems, organizations just
update Rippling, which then syncs the information to various apps thanks to
its wide range of third-party integrations.

Rippling's unique middleware accelerates the development of features like

permissions and automation, pulling data from tools like Zendesk, GitHub,
and Slack. This allows businesses to set up workflows and reports directly
within Rippling, avoiding the need to adjust each tool individually.

● HR SaaS: Handling payroll, benefits, time-tracking, talent growth, training, and more.
● IT SaaS: Manages apps and devices, including installation, sign-on, security, and
device logistics.
● App Exchange: Connects Rippling to hundreds of apps in various sectors from
design to security.
● Middleware: Named Unity, this bridges applications and data, offering shared
analytics, automation, and policies across Rippling's offerings and third-party apps.
 Competition
Rippling faces stiff competition from SMB-focused firms like
Gusto and Justworks. Rippling adopts a vertically integrated
model, developing its apps in-house. In contrast, Gusto favors a
platform strategy, partnering with third-party apps and insurance
vendors rather than creating all functionalities internally.
Justworks operates as a PEO, offering HR SaaS and insurance to
SMBs, but without allowing the HR SaaS to function
independently. Unlike Justworks, Rippling gives SMBs the
flexibility to opt out of PEO services yet continue using its HR
SaaS tools. A notable distinction is that while Justworks sources
90% of its earnings from lower-profit insurance deals, this
constitutes less than 10% of Rippling's revenue. Rippling's strong
emphasis on product development, supported by a sizable
engineering workforce, allows it to roll out new offerings and
updates more swiftly than its competitors.
 Business Model & Traction
Differing from single-solution SaaS businesses, Rippling's
multi-product design allows varied entry points. Rippling entices
with two main propositions:

● Cost-effectiveness: Using Rippling's bundled services is

more affordable than purchasing individual SaaS
solutions. Rippling's approach dilutes R&D and marketing
expenses across multiple products, offering better value.
● Integrated Experience: Similar to Microsoft, Rippling's
suite presents enhanced performance when utilized
collectively, boasting a unified user experience, third-party
integrations, and analytics.

Rippling operates 10+ product lines each generating over $1M in ARR, with
ambitions to unveil a new product every quarter for the upcoming year.
Anticipated to achieve $1M ARR within 5-6 months for each launch, Rippling
seeks to address all significant administrative tasks centered around
employee data. This strategy mirrors Salesforce's evolution, which
commenced as a CRM, but has since expanded its offerings, with CRM now
constituting less than half of its total revenue. Rippling achieved an annual
recurring revenue of $135M estimated in 2022, a 150% increase from the
prior year.
Expansion
Rippling, initially focusing on HR and IT SaaS, aims to
branch into areas requiring intensive administrative work,
leveraging its expertise in employee data management.
Rippling's vision is to offer an all-inclusive subscription,
possibly by developing in-house what it currently integrates
from third parties. This holistic approach positions Rippling
as a potential "Microsoft Office" for startups, serving as an
all-encompassing business platform for administration,
communication, and productivity, eliminating the need for
multiple standalone applications.

Furthermore, Rippling sees potential in targeting larger

corporations. While its products cater to companies ranging
from 2 to 2000 employees, its primary clientele currently
comprises SMBs and mid-sized businesses.
Valuation
Round Date Amount ($M) Valuation ($M) Investors
Rippling garnered $697M in investment from Bedrock Capital,
esteemed backers such as Bedrock Capital, Series D 5/11/2022 $250M $11,250M Kleiner Perkins
Caufield & Byers
Kleiner Perkins Caufield & Byers, and Sequoia
Founders Fund,
Capital, with its latest valuation at $11.25B. This 10/21/202
Series C $250M $6,500M Global Growth
valuation is notably higher than other HR tech 1
Capital
entities like Gusto, ADP, and Paycom. The Bedrock Capital,
premium valuation highlights Rippling's Series B 8/4/2020 $145M $1,350M Coatue
accelerated revenue growth, a significant Management
portion of SaaS-derived revenue, and the Initialized Capital,
Series A -
4/3/2019 $45M $270M Kleiner Perkins
opportunity to venture into nearby sectors like II
Caufield & Byers
identity and access management, endpoint
FundersClub,
security, business spend management, and Series A 3/14/2017 $7M NA Initialized Capital,
e-procurement. Justin Kan
Seed 3/2/2017 $0.12M NA Y Combinator