Rippling

Klarna

Rippling

Rippling uses modular pricing — companies buy the modules they need and pay per employee per month. The core platform (employee directory) is the foundation, with add-on modules for payroll ($8/month per employee), benefits, time and attendance, learning management, IT device management, app management, corporate cards, and expense management.

This modular approach means Rippling can land with one module and expand to many. A company might start with just payroll, then add device management when they realize it's available, then corporate cards.

Average revenue per customer grows as companies add modules.

The compound effect is the strategy. Each individual module might not be the best standalone product, but the integration between modules creates value that no combination of point solutions can match.

When your payroll system, IT system, and expense system all share the same employee database, automation becomes trivial.

Klarna

Klarna makes money from merchant fees and consumer interest. Merchants pay Klarna 3-6% of each transaction — they're willing to pay because Klarna increases conversion rates by 30%+ and average order values by 45%.

On "Pay in 4" (interest-free installments), Klarna makes money purely from merchant fees. On longer financing (6-36 months), Klarna charges consumers interest up to 25% APR.

Klarna also earns revenue from its shopping app (affiliate commissions when users discover and buy from merchants), and from its Klarna Card.

Rippling

Parker Conrad's origin story at Rippling is inseparable from his spectacular flameout at Zenefits. Conrad co-founded Zenefits in 2013 as an HR platform for small businesses and grew it to a $4.5 billion valuation in two years.

Then it imploded. Regulators discovered Zenefits employees had used software to cheat on insurance licensing exams.

Conrad was forced to resign as CEO in February 2016. The company he'd built was toxic, and his reputation was in ruins.

Most founders would have retreated. Conrad started Rippling in August 2016 — six months after being pushed out of Zenefits.

His co-founder Prasanna Sankar was a former Zenefits engineer. The insight behind Rippling came directly from the Zenefits experience: companies use dozens of disconnected systems for HR, IT, payroll, and finance.

When you hire someone, you set them up in the HR system, the payroll system, the benefits system, the laptop provisioning system, the software access system — all separately. When they leave, you have to remove them from each one individually.

It's a mess.

Rippling's premise was radical: build one unified platform with the employee record at the center. When you hire someone in Rippling, it automatically sets up their payroll, enrolls them in benefits, ships them a laptop, provisions their software accounts, issues a corporate card, and adds them to the right Slack channels.

One action triggers everything. When they leave, one click revokes it all.

Klarna

Sebastian Siemiatkowski, Niklas Adalberth, and Victor Jacobsson were students at the Stockholm School of Economics. In 2005, they entered a startup competition with an idea: let people buy things online and pay later.

At the time, online shopping was still new and most people were terrified of entering their credit card details on the internet. The idea was simple — Klarna would pay the merchant immediately, and the customer would get an invoice with 14-30 days to pay.

The competition judges hated it. The idea was dismissed as financially irresponsible and the team didn't win.

But Siemiatkowski pressed on. Swedish e-commerce was growing fast and merchants were desperate for any way to reduce cart abandonment.

Klarna's "pay after delivery" model was a hit because it shifted the risk — customers could receive the product, try it on, and only pay for what they kept.

The first customers were Swedish e-commerce merchants selling fashion and home goods. Klarna handled the invoicing, fraud detection, and collections.

Merchants saw conversion rates jump because customers were more willing to buy when they didn't have to pay immediately.

Rippling

Rippling's growth strategy is "compound startup" — building many products simultaneously instead of one at a time. Most SaaS companies pick a niche and dominate it before expanding.

Rippling launches new product modules aggressively, banking on the thesis that integration is the killer feature.

The land-and-expand motion works because every module sells every other module. An HR team that uses Rippling for payroll sees that IT device management is available.

The IT team that uses device management discovers corporate cards. Each module is a door to the entire platform.

Mid-market focus (50-2,000 employees) hits the sweet spot — these companies are big enough to need multiple systems but small enough that a single platform is appealing. Enterprise companies have entrenched vendors.

Tiny startups don't need the full suite. The mid-market wants consolidation and Rippling delivers it.

Klarna

Klarna grew by being embedded at checkout. The strategy was to sign up the biggest online retailers and become a payment option alongside Visa and PayPal.

Once Klarna was at checkout, consumers discovered it organically. The "Pay in 4" button became ubiquitous across fashion, electronics, and home goods retailers.

The Klarna app became a growth engine beyond checkout. By building a shopping app where users could browse products, discover deals, and track deliveries, Klarna turned from a payment method into a shopping destination.

The app has 35+ million monthly active users who start their shopping journey inside Klarna before even visiting a retailer.

International expansion was aggressive. Starting in Sweden, Klarna rolled out across Europe, then into the US, UK, and Australia.

The US became the biggest growth market — American consumers were especially receptive to Pay in 4 as an alternative to credit cards. By 2023, Klarna had 34 million US users.

Rippling

Building many products simultaneously means none of them is best-in-class individually. Gusto has better payroll for small businesses.

Jamf has better device management. Brex has better corporate cards.

Rippling's bet is that "good enough across ten categories" beats "best in one." That bet is unproven at scale.

The Parker Conrad factor cuts both ways. His Zenefits implosion is public knowledge, and some investors and customers remain wary.

Conrad has been open about the experience but the baggage is real. On the flip side, the "I failed and came back stronger" narrative resonates with many founders.

International expansion is complex. Rippling's Global product offers employer-of-record services in 100+ countries, but managing local labor laws, tax regulations, and benefits across dozens of jurisdictions is extraordinarily complicated.

Deel and Remote.com are dedicated international employment platforms that may execute better in global markets.

Klarna

The valuation collapse was humiliating. Klarna raised at a $46 billion valuation from SoftBank in 2021.

One year later, they raised a down round at $6.7 billion — an 85% haircut. It was the most dramatic valuation drop in fintech history.

Employee stock options were underwater. Siemiatkowski had to lay off 10% of the workforce.

The entire BNPL category went from hot to radioactive in months.

Credit losses are the existential risk. Klarna is lending money to consumers who want to buy things they can't afford to pay for right now.

When the economy slows, defaults rise. Klarna's credit losses hit $1 billion in 2022.

The company had to tighten underwriting significantly and pull back from riskier markets. The tension between growth (approve more loans) and profitability (reject risky borrowers) defines every quarter.

The IPO in 2025 was a comeback story but with caveats. Klarna went public at $15 billion — a major recovery from the $6.7 billion trough but still less than a third of its 2021 peak.

The company finally turned profitable by slashing costs with AI (replacing hundreds of customer service agents with AI chatbots) and tightening credit standards. But investors remain cautious about the BNPL model's long-term sustainability.

Rippling

Rippling Unity — the core employee data platform that connects all modules through a unified employee graph. Every system shares the same data, eliminating manual syncing.

Rippling Payroll — full-service payroll processing for US and international employees with automated tax filing. Rippling IT — device management (ship, configure, secure, and wipe laptops), software provisioning (manage employee access to hundreds of SaaS apps), and identity management.

Rippling Spend — corporate cards and expense management with policy enforcement built into the card itself. Rippling Global — international payroll and employer-of-record services covering 100+ countries.

Klarna

Pay in 4 is the signature product — split any purchase into four interest-free payments over six weeks. Pay in 30 lets customers receive the product first and pay within 30 days.

Financing offers longer-term payment plans with interest for larger purchases. The Klarna App is a shopping destination — browse deals, track orders, manage payments, and earn cashback.

The Klarna Card is a physical Visa card that lets users Pay in 4 anywhere. Klarna Creator is a platform for influencers to earn commissions sharing products.

Klarna AI is their customer service chatbot that handles two-thirds of support queries.

Rippling

Founders Fund led the Series A — Peter Thiel betting on Conrad's comeback. Kleiner Perkins and Bedrock invested in growth rounds.

Greenoaks Capital, Coatue Management, and Y Combinator participated. The 2024 round valued Rippling at $13.5 billion, led by Coatue.

Notable for being founded by someone investors initially wouldn't touch after the Zenefits scandal.

Klarna

Sequoia Capital, SoftBank, Silver Lake, GIC, Atomico, Commonwealth Bank of Australia, Heartland