Alex Fielding says he started his records management software company, Ripcord, because he was astonished.
It all began when the initial public offering of a friend’s tech company hit a snag over the retrieval of information for the IPO filing from paper records stored and managed by an outside company.
“I had heard my whole life that the world is going paperless,” Fielding says. First he teased his friend over the fact that a tech company had held key information in paper records that hadn’t been digitized. Then Fielding promised to find him a company that would convert the stacks of paper into computer data files.
“I thought there had to be a dozen companies automating going digital,” Fielding says. Instead, he found that scanning and digitization services were costly, and companies were living with the alternative of paying to store billions of banker’s boxes full of paper in huge warehouses.
“Everyone has a problem with paper,” Fielding says.
Since Ripcord was founded in 2015, the startup has developed sensor-guided robotic processes that rip out staples, scan pages with high-resolution cameras, identify text in the images with optical character recognition software, replicate the text in digital form, and classify pages according to document types, such as legal records or shipping manifests. The resulting digital records can be searched using key words, and made accessible to the client’s other business software from companies such as Oracle, Service Now, SAP, and NetSuite, Fielding says.
Ripcord, which has already processed more than a million records in trial projects with clients, announced Thursday it has raised $9.5 million in funding from Silicon Valley venture capital firm Kleiner Perkins Caufield & Byers, joined by Lux Capital, Legend Star, and Apple co-founder Steve Wozniak. The money will fund a move into commercial operation.
The Hayward, CA-based company is moving into a larger processing facility within a few weeks, Fielding says, and plans to hire 100 workers this year to staff it. Another 100 hires are anticipated for 2018 in the Bay Area alone, and Ripcord is looking at expansions to other locations with large concentrations of potential clients laboring under a paper burden. These include financial firms, health-related companies, and law firms. Silicon Valley law firm Wilson Sonsini was a client during Ripcord’s pilot phase.
Fielding says a branch in Germany is already in the works; other possibilities include the East Coast and shipping hubs such as Memphis. Clients’ paper records are shipped to Ripcord via FedEx. Rather than laboriously ripping out staples by hand, the company’s staffers just prepare the boxes of papers to be processed in a boxy unit about the size of a large walk-in closet. Workers feed the papers into a loader attached to the front of the unit.
“They remove any dead rats, trophies, or chewing gum, and fit the paper into the loader,” Fielding says. The staffers don’t have to separate out papers of varying sizes and weights. The automated system can process a box load of business cards, legal-sized paper, card stock, and pages as thin as rice paper, he says.
After that, clients can keep the digital records under Ripcord’s management, using the company’s search tools and linkages to other business software, Fielding says. He defines Ripcord as a software-as-a-service company. Rather than paying separate fees for shipping, digitization, and shredding of the paper records that can be discarded, clients pay monthly fees of $0.004 to $0.008 per page. Clients with the largest volume get the lowest rates. Some of the clients from the pilot phase have signed on for long-term contracts, Fielding says.
Before founding Ripcord, Fielding was an engineer at Cisco and Apple, and co-founded a startup with Wozniak. He never thought it would happen, he says, but he became “a geek about paper.”
Has he considered whether the market for this business will fade out over time, as paper use actually begins to decline?
The answers Fielding finds continue to astonish him. While some paper use is waning, such as printing magazines, the use of computer paper in offices is actually growing worldwide, he says. He estimates the records management industry’s current market at $25 billion.
Revenues for the big Boston-based records management company Iron Mountain (NYSE: [[ticker:IRM]]) grew to $3.51 billion in 2016, from $3.01 billion in 2015.
“That tells you, boy, this market is not getting smaller,” Fielding says.
But he says Ripcord encourages companies to create and keep all copies of their documents in computers, and to sign on with the company as clients for the management of their entirely digital records.
“We hope at Ripcord that we will be the biggest enemy of paper in the world,” Fielding says.
