Rippling Revenue, Valuation & Funding (2026)

you're gonna love this interview just got done editing it i'm glad i got it live for you i'll be in the comments for the next 30 minutes hanging out answering any questions you have in fact leave a comment below about data points or what you think is going to happen to the company and i will respond every comment additionally if you're just loving the content click the thumbs up and i will go and check out your profile as well and give your videos some love as well in the meantime enjoy the interview hello everyone my guest today is prasanna sankar he's building a very cool company called rippling which is playing in the all-in-one hr and it space he is the cto all right persona you ready to take us to the top yeah all right um so talk to us you know you come from the director of engineering role at zenifit so let's pick up there when did you leave benefits so i left right after parker left so you know when parker was fired from benefits i wrote him an email saying hey dude like you know i know you're going to start a company and i want to join you and parker was like no no i'm gonna you know i'm done um so that's sort of what kicked off you know the the rippling thing um after a month he was like yeah actually i'm starting a company so when what what company was that rippling oh got it got it very good so you guys are now working you're cranking together still today he's still active with the company yes very good he's the ceo so so walk us so how did you guys get connected so you were because you you kind of came from a competitive background you were number one uh an indian top code from a competitive programming perspective now how do you measure competitive programming is a number of code like lines written per minute or what um there are a bunch of online competitive you know contests that run um top coder is one google code jam is one um there is facebook runs some of those as well um and they have these algorithmic problems that you need to solve in a short period of time and you know they have a way to rank people so in those contests they'll rank one in india consistently for a while yep okay so i love this so you get to get so parker says hey is it gonna take a break i'm gonna take a break he lasts barely a year and he calls you up and goes all right barely a month he says persona i'm jumped back in so what year was that when did you guys write the first line of code for this uh 2016. okay 2016. and then when did you have your first dollar revenue do you remember quite a bit late i think 18 months out 18 months okay got it so you spent 18 months essentially building the product listen one of the things i always like to understand is how people approach building an mvp some people raise a ton and spend a ton without the first dollar revenue somebody will bootstrap to the first dollar so how much did you guys spend on the mvp 10 million dollars okay got it why what made it so expensive um it's just a large large build out i mean imagine if google sort of self-destructed and went under and you know bus went past there is a huge gap and void in the market that it leaves um so you know it involved uh building you know what zenefits would have built 10 years ahead so you know we had to build a large product to just even get started and what was your thesis in building the mvp what mousetrap were you building that you thought no one else had we clearly knew uh you know parker clearly has seen with like 50 million dollars worth of err um the needs of customers and you know they were asking for stuff that benefits did not have the bandwidth to build at all you know remember zenfits was growing insanely fast so you know we were completely focused on just servicing the existing products and you know on day one we had a clear road map of what the market really wanted and who were you so the product that you are building in the mvpn today describe the customer you're selling to your kind of sweet spot target customer our sweet spot customer is 5 200 employees in their company especially the ones that are growing fast which have a lot of changes that are constantly happening in the company that needs to be synced in all these business systems they're using so you know 500 companies fast growing and give me a sense of what they would pay so on average what's what's the rpu of customers paying you we are around i think 2015 to 20k per year but here yeah okay got it so this is caught 1500 to kind of 1800 per month kind of deals yeah yeah yeah okay and what are they deploying i mean as an engineer especially the one that helped build or really built the mvp you always like to see like okay we got a customer what's the first thing that they use did anything surprise you in terms of what you thought they would use versus what they're actually using um i mean i've been into several startups so far this one has been the least surprising this one has been you know the clearest roadmap that we've ever gotten uh we did have some surprises like you know uh we did have to make some changes um uh especially we thought we could sort of like get away without building the health insurance part uh but you know the competition was so intense that we had to sort of build it um you know every other player in the market was offering it so we had to build it so it took a bit of time to catch up to that but like largely it's been without surprises um you know parker sort of sat on day one and gave a four year six year road maps and you know we've largely been executing to that and you know most startups can't really say that i've never been able to say that in any of my other startups and how much capital did you guys raise on day one back in 2016 um day one parker put in you know half a million of his own money um and beyond that maybe in nine months we sort of raised around 10 million dollars which is what you spent on the mvp yeah a little more than 10 yeah yeah and today how much of your race total total maybe like uh you know 60 million or a little bit more than that 60 65 65 65 yeah yeah do you you know there are two kinds of people and i know there are very few founders that have done both there are a lot of founders that have bootstrapped a company to call not a lot but i know founders got a bootstrap to call it 30 40 50 million bucks an arr and there's others that just you know they're young they're hustlers they want a lot of risk so they say you know what we're going to go the vc route we're going to swing for the billion dollar offenses it's billion dollars or bust i kind of put you in that category is it accurate it's 100 billion or bust okay 100 x more aggressive than what i just said so i like that so how does your mind work on a daily basis to kind of kind of rationalize that that's what you're doing um i think you know it's a totally different ballgame it involves you know hiring the best that you can hire it involves understanding that you know people and the org needs to scale keep scaling and uh you know building technologies instead of people to do most functions which is what we sort of like learnt a lot from benefits this is failures how much how much of that upside you know when parker and you you know get back together in 2016 there's a conversation obviously about equity uh and equity splits relative to salary and upside and all that stuff and obviously you have vcs on the cap table as well at this point did you guys just do it easy do you split it 50 50 and then just take the delusion from vcs and go from there not really parker uh is owns more equity than i do we split at 60 40. okay that's good so 60 40 and then 10 million from vcs early on obviously dilutes you a little bit but there's still enough upside for you where you're happy to go on podcast and say we're 100 billion or bus because if that happens you're a billionaire yeah yeah yeah very good okay let's go back i always like to get that from a mindset perspective because it's a very different mindset to do what you're doing versus bootstrap to you know 10 20 million bucks and get rich off cash flow right there's not a right or wrong they're just different yeah so you launch in 2016 function of the market yeah yeah well tell me to go deeper there since you went there so what are you seeing in the market that tells you you can build a 100 billion dollar company in this kind of all-in-one hr space yeah i mean you know zenifits grew from zero to 50 million dollars in like less than two years uh in arr and you only sort of get that kind of growth by just like skimming the cream of the cream of the cream of the market right like you know it you know it's clearly signals insane market pull and huge demand for the product and it clearly signals you know potentially 100 billion company that could get created and if you look at all the huge companies that got created they had these kind of trajectories of growth rates and market pull which is what we've seen so you know it was very clear that you know this is a huge market with the winner take all dynamics you know especially um you know the ultimate players like an app store where any sas developer can sort of plug in uh plug in and publish his app and uh you know rippling provision seats uh and licenses on top of this uh on you know and provides distribution for these apps right so it's it is clearly a network effects business it's a winner take all business so you know it requires to be number one like you know it requires you to go for the number one so as you're going for that number one spot there's a lot of people that would argue and say whoever can pay the most for the customer because their economic economics are strong will win the customer so you raise a lot of capital you have a war chest your average first your acv is you said between 15 and 20 000 bucks what do you spend on fully weighted cac to get that customer we um we almost sort of like um our payback is like you know is insanely profitable right now it's like one to two months or something like that so you know uh it's not it's not true that's not the game that we're playing you know so yeah that means you're spending two or three grand to get a fifteen twenty thousand dollar your customer um actually that's probably not true it's a sales rep comp that we sort of recoup on the first month uh so our total payback might be like you know nine months or something like that so yeah um um so we're not in the business of like paying the most to get the customer um at all um we are you know we are pretty unique nobody else has like what we have in terms of product breadth um you know um there is no competition in the market that you know there is no one else out there going to the customers with the sales pitch that we are going with which is like we are an all-in-one solution uh with an operating system to run your company um so you know we are pretty differentiated on that well there's a lot to be fair there are a lot of companies where the prize is the same 100 billion dollar hr tech kind of store coming but the mousetrap they're using to get there is different so they today would not describe themselves as all-in-one they would say we do this specific thing very well and they're getting a lot of traction there and they will expand and become all-in-one why have you chosen to basically say it we're just gonna say we're all in one thing we're not gonna say we're a mousetrap and we're the best at this one thing we're just saying we're the best for all of it it's usually easier to get there that way um what we've seen you know from zenifitz and you know in any of the other hyper growth companies that i've been at um is once you get insane level of traction and market pull um you know things are compounding at a really huge rate that you're just like struggling to keep up with the existing product breaking and you're just like constantly patching and fixing that and you know my hypothesis is that you know if you need to create a large hyper growth company whatever you built in the first like 18 months or something is sort of the extent to which you're going to build in the life cycle of your company and we've seen that at benefits where we unsuccessfully tried to enter into new markets and you know uh failed continually well okay so let's we'll go back to that in a second but so for rippling between 2016 to 2017 you know you spend 10 million bucks mvp get your first dollar revenue in 2017 how many customers have you scaled to now today we have around uh you know 2 000 or more than that customers okay and how do you how do you define a customer um someone who pays okay but is it in other words is that 2 000 companies that pay you or that's the number of seats per a smaller number of companies it's two thousand companies that yes i see okay and about how many seats is that i'm not sure um okay our um i think our average customer would probably have uh 30 employees but i'm not you know i could be totally wrong in the ball yeah um yeah we've we've been sort of attracting larger and larger companies as time goes by so you know uh my estimate could be really off yeah yeah well i mean look if we take 2 000 customers times that acv target you told me earlier that would put you about three million dollars a month right now in terms of run rate is that ballpark accurate um i don't think that's accurate there's something missing in that match but you know i don't think that's accurate which of those two numbers is off so you said earlier twenty thousand dollar acv and you just said two thousand customers those multiplied would put you at a three million run rate um yeah yeah i'm not sure um i don't wanna get into the revenue numbers yet you know because of the backlash uh you know we're sort of like pretty quiet about the revenue numbers because you know zen if it's had a lot of coverage around that and you know it sort of anchors out that um so we're sort of like not really talking about the revenue numbers but you know i can tell you that it is sort of the fastest growing company that i've kind of like seen you know we've kept it under the radar um you know it's it's sort of like at slack kind of growth rates well persona so just to be clear i get people that come on all the time that are raised a lot of capital they're burning like you wouldn't believe they say they're the fastest growing and when you try and get quantification they go oh oh we're not we're not talking about it and usually it's right so when i'm looking at when i'm looking i never want to bring out a revenue number unless the guest in this case you provides the data for me to get to that number so you know we're very sophisticated sas audience very smart people listen 10 million downloads they will take 2 000 customers times in our poo to get mrr that's how the math works so i just want to give you one second to potentially correct either of those numbers because that's what's going to happen they're going to multiply that acv you said times 2000 customers and back into three million a month in revenue what i would say is all these numbers are shifting really fast you know the acv is growing really fast no but we talked about arpu though arpu is average revenue per user per month so is what you're saying basically but by the way we can i'll move on from this if you can just i just want to quantify this to put an end on this part of the story right what i hear you saying is you're moving upstream which means your new acv today might be 20 000 acvs but you might have historical cohorts that paid less than that so you can't just multiply 20 000 times 2 000 customers to get a 36 million run rate today that's aesthetic i see it okay cool i think that's a good i think that's a good kind of close off to that story so the lessons there is you start off with again cheaper potentially lesser value cohorts smaller team sizes then now the average team is 30 people 20 000 acvs you're scaling uh and go and today you have two thousand paying customers yeah now is a thirty million dollar run rate you know in your sites in the next 12 to 24 months or do you think you need more time to get there um i'm going to decline on that one um you know i i don't know i mean yeah i don't want to answer that one okay why do you decline that but then uh two minutes prior you say we're the fastest growing company it's hyperscale it's hyper growth it's the best we've ever seen it seems those are at very opposite ends of the spectrum we don't want to talk about you know revenue numbers and anchors out there um but you know i can tell you that like you know i've it's sort of like kind of you know at the space at which the company is growing i've never seen it's incredible so i can tell you that yeah but going from a dollar a year to a thousand dollars a year in revenue is incredible growth rate it means nothing i understand you you understand i'm asking these questions so that to try and help you fill out the story and so that it's so it's less vague not more vague that's the only reason i'm i'm continuing to ask you these questions so you can keep saying best growth all you want but my audience again they're smart they're going to listen to that and go something's fishy here i just want to give you any any opening you want to clarify anything um um you know i think you know 36 million dollars in arr is not really far away fair okay that's a good and that's a good end to that part of the story so let's move on um that's good um where are you getting most the growth so so zenifitz famously got into all kinds of hot water because of really it was the market motion do you work with the providers do you not like are you a broker are you not a broker so what's the go to market strategy for rippling um we so ripping is an all-in-one uh product right so we have a payroll system we have an insurance product we have the hr product and so on so um we use all these different channels to distribute the product today um so you know we could go and sell to accountants we could go and sell through insurance brokers and we could go and sell through you know iet admins um and we use we typically use all of them to our advantage um which gives us some level of virality as well so just just to be i mean let me let me go back to the roots then the first hundred customers you signed up how did you sign what channel did you mainly rely on to get the first hundred email mostly email okay tell me more about that like cold outreach scored outreach yep wow okay what i mean how did you find their email and what job title were you targeting we were targeting at that point in the beginning it was like founders um you know ceo cto um it is mostly that um and then as we sort of continue to grow and scale and expand uh you know we went into the hr job title the id admins and so on okay very good now again you've raised 65 million bucks uh i imagine you guys are actively growing the team what's the team size today it's around 200 people how many engineers do you manage 100 people wow okay 100 engineers now do you have quota carrying reps internally for an inside sales motion or it's all channel partners we do have quota getting reps how many of those um i think maybe like 20 people today okay okay very good now are these are they following the same kind of inside sales playbook as you might have seen in xenofits as well or is it totally different it's very similar playbook um yeah it's it's not very different okay so similar playbook by the way i would define as you know quota target is about five times what full ote is uh you have an sdr to account executive to customer success management kind of flow is that accurate yeah yeah okay great and then look obviously building a big sas company churn is critical can absolutely destroy you so when you look at your gross revenue return over the past 12 months what's that coming at um i'm not sure actually i don't know we look at churn all the time the churn is seasonally high towards the end of the year in our business um and it sort of varies fluctuates a lot um um yeah i'm not really sure like where it stands today do you know if when you add your expansion revenue from historical cohorts back to the churn from those cohorts is net revenue retention greater than 100 percent yeah yeah it is it is significantly greater than 100 when we raised our last financing round from kleiner it was around 300 which was something you know abnormal um that was mostly because you know we were especially selling to fast growing companies so you know they grow so it was abnormally high now as we sort of get larger portion of the market it is you know it is less impressive but it's still pretty impressive yeah yeah getting that kind of net revenue rate the way you do that is exactly how you just described but to your point as you scale right even 140 150 net revenue retention number is world-class you know looker was 130 when frank came on the show a year before the google acquisition so anywhere in that range is obviously super healthy yeah absolutely most that upselling is coming directly from seat upsells or are you upselling based off some utility metric or a feature-based upsell most of it has been seat upsells which is automatic right like we don't even put you know we have not done historically a great job on upsell so far you know right now we're sort of investing more on that but most of it is just like organic seed ads very good okay and so when was the klein arrays the most recent raise it was uh feb last year so around like a year ago okay and how much was it for uh it was like uh um 45 million okay 45 and so how were when you and parker got together and whoever else was on your strategy team and said hey we're going to go do a fundraise take you know let's go macro here for a second the world economy today as a sas company that's scaling how many months of runway are you trying to raise for just to give yourself enough cushion we were trying uh to raise for like 30 months at the time and and help me you know why is that you know in the past you know three years ago i was interviewing founders it might have been sounded more like 18 months because remember the more you raise the more dilution it is right so why was 30 months kind of the target has been you know uh pretty conservative on the stuff like you know you can you know if you can either get diluted a bit more or you know can run out of money so um you know we've always chosen or you can or you can drive towards profitability you can you definitely can um you know every round that we raise we sort of like have the goal that you know that round gets us to profitability um and then you know there is a plan a that the opportunity in front is just like huge and you press the accelerator button where the return on investment is clearly visible and then you raise such raise again yep so just to be clear when you raise the 45 million trying to cover 30 months of burn what i hear when you say that is you guys are totally comfortable when you look at the market and how big it is you're going after burning up to 1.5 million dollars per month for the next 30 months yeah yeah very good all right anything else i missed that you definitely want to sneak in before we wrap up um no great thanks for chatting all right let's wrap up here with some easy ones famous five number one favorite business book um hard thing about hard things number two is there a ceo you're following or studying um number three yeah number three what's your favorite online tool for building the company um asana number four how many hours of sleep to get every night eight okay and which situation married single kiddos um single kid okay good single with one kid and uh how old are you i'm 32. okay last question what do you wish your 20 year old self knew that uh i enjoy finance as well you enjoy wait we didn't touch on that at all in the interview why do you enjoy finance um i think you know the two things i really enjoy are like coding and trading um both of them um require no you know you could be the expert you know like experts uh don't really exist you know they operate on very simple rules buy low sell high or you know you know write some ad subtract go to and you know experts don't really matter you can reason from first principles guys there you have it persona and parker left zenifits about the same time back in 2015 2016 and then jumped into the new company rippling together raised 10 million bucks right away parker put in about 500 grand they split equity 60 to parker 40 to persona they're now scaling nicely trying to be the all-in-one hr and it tech platform currently serving 2 000 customers uh persona says 36 million bucks in terms of run rate is not too distant in the future we'll see how that pans out but they're again scaling through all kinds of channels whether it's resellers or their 20 account executives they got a team today of about 300 sorry 200 people 100 of which are engineers 65 million dollars total raise net revenue retention of over 300 spending about 10 000 bucks to get a new customer for call it a 7 to 14 month payback period persona thank you for taking us to the top thank you so much stephen you guys know i fight like heck to get these data points for you from these ceos that rarely do these kinds of shows if you want more shows like this make sure you subscribe right now we're trying to get 10 000 youtube subscribers by the end of september here 2019 and it would mean the world to me if you clicked now to subscribe additionally i've got two more great interviews for you if you want more data points from the world's leading sas ceos click and watch one of them right now