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Fallen Unicorn CEO Is Now A Billionaire

Parker Conrad, ex-Zenefits, is now worth $2.2 billion thanks to the success of his new HR software startup Rippling. His cofounder is also a billionaire.

Six years after his first HR startup Zenefits blew up, Parker Conrad’s redemption is complete. He’s now a billionaire–with a net worth of $2.2 billion, by Forbes estimates–in the wake of his new HR startup Rippling’s lofty valuation of $11.25 billion.

Back in February 2016, Conrad had resigned under pressure from Zenefits, while the former unicorn retrenched and slashed its valuation by more than half under new leadership. But by April that year–after spending time at home, depressed and binge-watching Star Wars movies while the Securities and Exchange Commission and state insurance commissioners opened investigations into his former startup–he was back with a new HR software startup, Rippling.

He was filled with ideas for how to do things better this time, and there was no shortage of venture capitalists willing to back him. Today, tech stock valuations have tumbled and many VC-backed companies are hunkered down. But Conrad, 42, is prepared for the downturn, having just raised $250 million for Rippling last month.

While Conrad declined to be interviewed for this story (and neither he or Rippling would comment on his wealth), in a video interview in May from his home in San Francisco, he said that Rippling still had cash on hand from previous financings and hadn’t needed to raise new funds. “For me, the rationale was wanting to insulate the company from any potential future macro shock,” he said then. “I’m terrible at predicting these things.”

So now his second HR startup is prepared to weather the storm with a boatload of cash. All told, the company has now raised $700 million from top firms that include Kleiner Perkins, Sequoia and Initialized Capital. And having been scarred by Zenefits, Conrad has made hires at Rippling designed to avoid past mistakes, including general counsel Vanessa Wu, who joined from publicly traded LiveRamp, and chief financial officer Adil Syed, who previously worked at Snap.

With tech’s recent downturn, Parker Conrad’s decision to load up cash at Rippling with a $250 million fundraise in May looks smart.

We first wrote about Rippling two years ago as part of the 2020 Forbes Next Billion-Dollar Startups list. Conrad was trying to find redemption with Rippling, which aims to make human resources easier with software, and spoke openly about those efforts.

Rippling today is worth two and a-half times the $4.5 billion that Zenefits was worth at its peak. Conrad, a stocky man with reddish blond hair who grew up in a wealthy family and attended Harvard, has crossed the billionaire mark for the first time. His cofounder, Prasanna Sankar, 34, Zenefits’ former director of engineering, is now also a billionaire, worth roughly $1 billion by Forbes estimates.

Rippling’s advantage is that it not only automates payroll, but it also automatically manages software tools, apps and work groups that new employees need—and it keeps all of those updated as employees get promoted, change groups or leave. While this kind of administrative work isn’t the sexiest business, it can save companies countless hours of their executives’ time and the headache and cost that go along with that.

The company has grown rapidly since its founding. Its annual recurring revenue today is above $100 million (though the company declined to be more specific) compared with $13 million when we profiled it in 2020. Revenue for accounting purposes is lower than ARR, a sales metric that subscription-based software companies like Rippling prefer to use.

“Early on at Rippling, there were a lot of moments that we would talk to customers and they would get spooked because of Zenefits,” Conrad told us this spring. “I always thought we’re just going to have to build a product that is that much more compelling in order to bring people in….We’re going to have to be twice as good to try to overcome that, and at a certain point those concerns will start to melt away and it will be a huge accelerant for the company.”

For more on Parker Conrad and Rippling, see our feature, “The Comeback of A Fallen Tech Unicorn CEO.”