How Rippling Scaled Outbound to $350M+ ARR
(and how to replicate it)
Read time: 18 min
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Rippling’s #1 Growth Engine for Reaching $350M ARR (and how to replicate it)
Let's unpack the $350M ARR Outbound Machine.
Rippling has built an outbound sales powerhouse that brings in a staggering $48-50 million ARR each year, all fueled by their current SDR organization. For a company that sells essential tools like HR, payroll, IT security, and device management SaaS to SMBs and mid-market companies, outbound has been a key lever for explosive growth.
Today’s newsletter dives deep into Rippling’s #1 growth engine—outbound sales. We’ll not only break down the stages of their outbound strategy but also explore the evolution of their sales team and share real examples of their cold email tactics.
Here’s what's on the menu for today:
Part 1: Rippling’s Growth Story
Why Rippling has grown so rapidly and the foundation that set them apart.
Part 2: The 4 Stages of Outbound Evolution
How Rippling strategically scaled their outbound approach in stages, adapting to each new level of growth.
The 4 Stages of Rippling’s Outbound Journey
Stage 1: Founder-Led Sales (June 2016): Where it all began, with the founders directly selling to early customers.
Stage 2: The First GTM Architect (May 2017): Bringing in their first Go-To-Market hire who shaped Rippling’s early sales playbook.
Stage 3: Programmatic Outbound & Foundational Sales Team (Q3/Q4 2017)
Stage 4: Launching a Full Outbound SDR Organization (2022-Present): Building a specialized team with 200+ SDRs, complete with real-life cold email examples from Rippling.
#1 Rippling's Growth Story
The growth trajectory:
Revenue Expansion: Rippling doubled its ARR from $175 million in 2022 to $350 million in 2023—a remarkable 100% year-over-year growth.
Early Momentum: In 2018, the company was already seeing 20-25% monthly ARR growth, even reaching 29% in January 2019.
Customer Loyalty: With a 200% net dollar retention (NDR) by 2022, every dollar earned grew to nearly $2 the following year as customers expanded their usage.
Driving factors behind Rippling’s success:
Product Investment: Rippling’s commitment to deep R&D allows it to build multiple business lines simultaneously, an approach that requires significantly more engineering resources than a typical point-SaaS company. Compared to their competitors: 30% of their headcount are engineers.
Large Market Opportunity: By positioning itself as a “compound” software business—serving HR, Finance, and IT—Rippling can capture a far broader total addressable market (TAM) than single-product SaaS companies.
Sales Efficiency and Low CAC: With a highly efficient sales and marketing engine, Rippling keeps customer acquisition costs (CAC) low and sees faster returns. For example, while Rippling’s overall CAC payback is 17 months, cross-sell CAC payback is just 10 months—considerably better than the SaaS industry average of 28 months.
Note: CAC includes the full costs of sales, account management, & marketing (both payroll and marketing budget), as well as the net cash loss from IM and Pro Svcs teams (IM + Pro Svcs 1x bookings, less payroll costs). Expenses are counted within the quarter, except Marketing spend is from the prior quarter. The recurring gross profit added
is calculated based on New ARR from NLS and Cross-Sell, multiplied by the company’s consolidated gross profit % (excl. IM and Pro Svcs costs, which are in CAC). Excludes reseller and revenue share pricing changes. International ARR includes both core SaaS ARR closed by in-country reps and the Global ARR attached to int’l deals. Cross-sell includes AM cross-sell and Spend & Global AE cross-sell.
Building on Strong Foundations
Product-Market Fit: Rippling’s offerings resonate with the needs of companies across industries, targeting businesses with up to 2,000 employees.
Multi-Persona Selling: By addressing the needs of HR, Finance, and IT, Rippling strengthens relationships and maximizes the value delivered to its clients.
Product Diversification: Rippling has rapidly expanded from a single product to over 30, launching an average of five new products per year. This ongoing expansion is central to its strategy, aiming to be for employee data what Salesforce is for customer data.
Key Metrics and Industry Context
Revenue Milestones: Rippling scaled from $0 to $350 million in ARR by 2023, supporting a $14 billion valuation.
Team Growth: The company has scaled its GTM team from 0 to 1,500 members by 2024, reflecting its rapid growth.
Efficiency Benchmark: Rippling’s CAC payback period of 17 months outperforms the average SaaS company’s 28 months, positioning Rippling as a leader in sales efficiency and profitability.
Rippling operates in an incredibly competitive space (seriously):
G2 Map Snapshot: There are 677 listings in the Core HR category alone. To put that in perspective, Cognism’s competitive landscape has around 172 competitors—Rippling is playing on a much more crowded field.
Positioning Strategy: Rippling positions itself as a premium product in a market flooded with options. Despite this, they’re winning against their direct competitors with impressive success rates, ranging between 31% and 70%.
Takeaways:
Outbound Excellence: Rippling’s optimized outbound approach is central to its success. The company’s ability to continuously engage new customers has been a powerful engine for growth, particularly as it expanded into multiple product lines.
They focused their efforts mainly on programmatic outbound, and only launched their outbound SDR team in 2022 at $100-175m ARR.
Compound Model Advantage: Adding new products and expanding market reach enables exponential growth, especially in compound software models.
Customer Expansion: High NDR rates showcase the value of upselling and cross-selling to existing customers.
Sales Efficiency: Lower-than-average CAC payback periods indicate a highly efficient sales machine, a competitive advantage in long-term profitability.
Rippling’s strategy combines a robust outbound approach with product innovation and market expansion. Its compound business model, strong R&D, and efficient sales are key ingredients in its high-growth recipe, making it one of the standout success stories in SaaS. In a crowded, commoditized market, Rippling’s strategy is paying off.
2. The 4 Stages of Outbound Evolution
Now let's talk about their #1 growth engine and how it evolves.
Here are the 4 stages:
Stage 1: Founder-Led Sales (June 2016)
Stage 2: First GTM Hire: The Architect of Rippling’s GTM Strategy (May 2017)
Stage 3: Programmatic Outbound and Foundational Sales Team (Q3/Q4 2017)
Stage 4: Building an Outbound SDR Organization (2022-Present) + real cold email examples
Stage 1: Founder-Led Sales (June 2016)
The CEO Parker Conrad focused mainly on building the product.
It took Rippling 18 months to bring home their first dollar of revenue. They spent a hefty $10 million to build the minimum viable product (MPV).
Stage 2: First GTM Hire: Building Rippling’s GTM from Scratch (May 2017)
When Matt Plank joined Rippling, he wasn’t there to “lead” a team; he was there to create one from the ground up. As employee #5 and now CRO, Matt rolled up his sleeves, diving into cold calls, emails, and closing deals to lay the foundation for Rippling’s growth.
Building Blocks: The Early Strategy
Laser-Focused ICP: Matt focused in on small, high-growth YC companies with under 100 employees. Why? Because they were using the power of getting introductions from investors to their portfolio companies.
No Fancy Tools, Just Results: Matt kept it simple with just Salesforce, basic outreach sequences, and a lead database, enough to get results without overcomplicating things.
Competitors: Rippling entered a space crowded with big players like Gusto and Zenefits.
First Messaging attempts:
Initially, they went with:
“We’re an all-in-one HR solution.”But it didn’t click. So, they shifted, acknowledging competitors directly and focusing on what set Rippling apart:
“I’m sure you’re already automating HR and payroll. But what about the rest? Who’s setting up computers and managing accounts for all the tools your new hire needs?”Solving the Onboarding Nightmare
The Real Pain: A decade ago, onboarding was simple—just set up email and a conference line. Now, companies juggle 20-50 tools per hire, especially for engineers, often done manually.
Rippling’s Fix: Rippling automated the setup and account creation, saving companies hours and eliminating headaches.
Key takeaways
Get Your Hands Dirty: Great GTM leaders don’t just strategize from afar. They’re in the trenches, building the playbook firsthand.
Stop Playing it Safe: In crowded markets, generic pitches won’t cut it. Rippling succeeded by addressing real pain points and acknowledging competitors head-on.
Solve Real Problems: By focusing on automating manual tasks, Rippling became indispensable to customers—doing what competitors couldn’t.
Stage 3: Programmatic Outbound and Foundational Sales Team (Q3/Q4 2017)
At this stage, Matt has found some success and now needs to build a strong sales team that can scale. He starts by SDRs and AEs from his network and focuses on programmatic outbound as the primary strategy to drive demand.
1. Programmatic Outbound as the Main Channel
Programmatic outbound is a sales approach that relies on automation and data to reach a large pool of potential customers. For a growing company like Rippling, it’s a cost-effective strategy because it scales without needing a full team of SDRs for every outreach. Instead, it’s about setting up smart systems to connect with a high volume of prospects quickly and efficiently.
Why Use Programmatic Outbound?
Cost-Efficiency: Unlike hiring a large team, programmatic outbound is affordable and scalable. All you need is a well-targeted database and the right software to handle the heavy lifting.
Massive Reach: With a well-built contact list, you can reach hundreds of thousands of prospects—your Total Addressable Market (TAM)—through automated, targeted outreach.
Predictability: This approach is reliable because it runs on a clear formula: Send X emails * Conversion rate = Generate Y leads. You can set benchmarks for success based on your response rates and adjust over time.
How It Works
Imagine programmatic outbound as a simple numbers game:
For every 3,000 emails sent, you might expect 15-30 demos (based on a 0.5%-1% conversion rate).
To measure success, focus on two key metrics: emails sent and conversion rate (responses that turn into booked meetings).
The Role of Mech SDRs
To manage responses, they hired specialized SDRs (called “Mech SDRs”) who handled replies, engaged with interested leads, and booked meetings. Each SDR had a monthly target of 50-60 demos, making this model efficient for customer acquisition.
Scaling Programmatic Outbound
Scaling this model is straightforward: simply add more quality leads to the database and send more emails. As long as you have a large enough leads to target, you can keep this cycle going and increase the flow of new leads. The constraint is your TAM.
2. Growth Model: The Revenue Math
Balancing Demand and Sales Capacity
In sales, success isn’t just about hiring more reps. Adding more team members is only effective if there’s enough demand (demos) to keep them productive. To avoid underutilizing reps, Matt needs to ensure a steady flow of demos before expanding the sales team.
Example Calculation: How Much Demand Does Each AE Need?
In Rippling’s early days, each AE needed 35 accepted demos (S2s) per month to hit their targets. As the business grew, they required fewer demos to meet the same goals because of two key factors:
Higher Deal Values (ACV): Each deal was worth more, so fewer deals were needed to reach revenue targets.
Improved Win Rates: The team got better at closing deals, so each demo was more likely to turn into revenue.
Understanding the Sales Stages (S1 and S2)
Stage 1 (S1): Scheduled Demo — the first meeting with a prospect.
Stage 2 (S2): Sales Accepted — when a prospect moves to the next stage of the sales process.
Rippling calculated how many S2s (accepted demos) each AE needed every month. Early on, 35 S2s per AE was the target. Today, that number is lower due to increased deal size and win rates.
Aligning Sales Capacity with Demand Generation Capacity
Think of demand generation and sales capacity like gears in a machine; if one gear moves faster than the other, the machine won’t work smoothly.
Here’s how it breaks down:
Sales Capacity: How many deals your team can handle.
Demand Generation Capacity: The volume of S2 that can be created through marketing and outbound efforts.
If sales reps have the capacity to handle 10 new deals in 40 hours but only 7 qualified demos are generated, the extra capacity goes to waste. The two must be aligned to maximize productivity and efficiency.
The Reality: Hiring more reps doesn’t automatically mean more demos or revenue. The real question to answer is:
How will you generate enough opportunities for every rep?
3. Hiring Strategy and Culture Fit
Who to Hire First:
Matt begins by hiring SDRs and AEs from his own network, focusing on candidates ready for the demands of a startup environment.
Creating a Growth Path:
Initially, most promotions come from within, helping build a core team that understands the culture. Once the team grows to around 30-50 reps, he starts looking for external hires to bring in fresh perspectives.
4. Structuring the AE Team for Scale
Types of AEs: Matt introduced three specialized AE roles to support the company’s growth:
Core New Logo AEs – handle all new business.
Account Managers (AMs) – focus on existing customers, especially cross-selling.
Product AEs – a unique team specializing in new product launches. They co-sell with Core AEs or AMs when expertise on a new product is needed.
Why Product AEs:
As Rippling introduced new products that targeted different audiences, even top AEs couldn’t keep up with every launch. Product AEs solve this by acting as specialists, handling complex or highly specific offerings.
5. Challenges in Scaling Programmatic Outbound
Managing Deliverability
As Rippling scaled email outreach, email deliverability became an issue. High volumes of outbound emails can lead to lower inbox placements or spam flags.
Database Limits
Eventually, Rippling ran into the constraint of account availability; they could only send emails to so many potential customers (their TAM). When they reached the ceiling, they had to rethink their strategy to meet growth targets.
Next stage
Matt faced a classic challenge for a VP: some reps couldn’t keep up with the pace of growth. The company was outgrowing them. When this happened, Matt’s solution was to adjust roles to better fit each rep’s skills or, when necessary, bring in fresh talent from outside. This approach was key to maintaining momentum, but it required clear communication to manage expectations and reduce frustration.
For reps, it wasn’t always easy—growth at Rippling was a fast-moving train, and staying on board meant adapting to rapid changes. Those who felt left behind often chose to leave, as staying no longer felt right for their career paths.
Rippling’s journey with programmatic outbound followed a similar path. Programmatic outbound was a powerful engine for early-stage growth—until they ran into a wall. About two years ago, they hit the limit of their target database, with too few accounts remaining to meet their ambitious growth goals. This constraint forced Rippling to adapt its outbound strategy to ensure they could keep scaling effectively.
Key Takeaways from Stage 3
Demand Drives Sales Capacity: Only hire more AEs when you’re sure you can generate enough demos to have enough pipeline to close. Building a sustainable demand pipeline is crucial to avoid wasted capacity.
Programmatic Outbound Works Well Early On: Programmatic outbound is an efficient and cost-effective way to build initial momentum. It’s great for reaching a large audience at a low cost, but its effectiveness can plateau as you exhaust your potential leads.
Role Specialization Supports Growth: They Introduced product AE roles to handle complexity better and support ongoing product expansion. This also prevents burnout among Core AEs who may struggle to sell diverse products effectively.
Communicate Growth Expectations Clearly: Fast growth can cause friction. As some reps struggle to keep up, it’s essential to manage expectations and communicate career progression opportunities. Reps may grow out of their roles, and moving them into new positions aligned with their strengths can help them feel valued and supported.
Stage 4: Building an Outbound SDR Organization (2022-Present)
Here’s what’s fascinating about Rippling’s outbound team:
For both sales and marketing, demos booked per month is the key metric that drives everything.
And here’s a bold statement from Rippling’s GTM leadership: Outbound SDRs are simply more productive than AEs when it comes to outbound.
The SDR org reports directly to the CRO. It’s rare to see SDRs separated from both marketing and sales. But Rippling does it differently—they’ve positioned the SDR team as the bridge between both departments.
Their main channel is calls. They book 50% of their outbound demos via cold calling.
Most companies stick to cold accounts, but Rippling took outbound further:
Customer Expansion: Using existing customer data to drive cross-sell and upsell.
Market Expansion: Leveraging outbound to break into new countries.
Channels/Partnerships: Building new pipelines with strategic partners.
Why did Rippling wait until 2022 to build an Outbound SDR team?
Rippling initially relied on programmatic outbound for early growth. They automated outreach to thousands of accounts, but eventually hit a wall…
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