It’s estimated that startups and small businesses waste in excess of $130B each year as a result of poor visibility into spend management. By leveraging automation, companies can not only recapture a portion of this spend but also reduce the time employees spend on low-value tasks. Ramp is a corporate card and all-in-one spend management platform that’s designed to save companies time and money. All spend activity is seamlessly integrated into the company’s expense management platform that handles bill payment, card issuance and controls, accounting, and reporting, saving finance teams countless hours allowing them to focus on value maximization rather than tedious data entry. The platform is free with Ramp making its margin on the interchange fees. Revenue grew 10x in 2021 and the platform has 5000+ businesses trusting Ramp for spend management, corporate credit, expense management, and the company has recently expanded into travel spending.
AlleyWatch caught up with Ramp CEO, serial entrepreneur, and Cofounder Eric Glyman to learn more about how the founding team’s experience post-exit with Paribus inspired the business, the company’s strategic plans, traction, latest round of funding, which comes at an $8.1B valuation (up from $3.9B in ’21), and much, much more…
Who were your investors and how much did you raise?
The raise is an addition to Ramp’s Series C and consists of $200M in fresh equity along with $550M in debt, and brings Ramp’s valuation to $8.1B. As with previous rounds, this came from inbound interest from investors – Founders Fund led the round for their fourth investment into Ramp, alongside existing investors including Stripe, Iconiq Capital, D1 Capital, and Thrive Capital, among others. New investors include General Catalyst.
Tell us about the product or service that Ramp offers.
Ramp is building the next generation of finance tools – from corporate cards and expense management, to bill payments and accounting integrations – designed to save businesses time and money with every click.
What inspired the start of Ramp?
Karim and I cofounded Ramp in 2019. Prior to Ramp, we founded Y Combinator-backed Paribus, a price-tracking app, which we sold to Capital One in 2016. We developed the idea to build software aligned with—and protective of—consumers, which ultimately led us to found Paribus. Frustrated by the way the traditional corporate card players actually encouraged businesses to spend wastefully, we left their secure senior positions at Capital One to found Ramp.
Ramp is building the next generation of finance tools – from corporate cards and expense management, to bill payments and accounting integrations – designed to save businesses time and money with every click. Thousands of businesses are spending an average of 3.3% less and closing their books 86% faster by switching to Ramp’s finance automation platform. Ramp powers the fastest-growing corporate card in America and enables billions of dollars of purchases each year on the heels of nearly 10x year-over-year growth. The platform leverages AI and cutting-edge technology to automate spend management and provide insights that give finance leaders complete visibility into every dollar spent across their business.
Ramp competes, and wins, against established billion-dollar players like American Express, Concur, Bill.com, and Expensify, which aren’t innovating in the best interests of their customers.
How is Ramp different?
Much of the industry is misaligned with the best interests of customers, designing points systems that incentivize companies to spend more than they planned and cumbersome software that wastes employee time. Ramp is the first in the industry to design its products to help companies spend less money and time.
Time savings: We’re helping companies close their books in eight hours instead of the industry median of eight days – freeing up 3.5 million hours of manual work.
Money savings: We’ve delivered over $135 million in savings for our customers to date.
Processing time in seconds: It takes seconds for us to process a receipt or memo from the time it’s submitted. And because of how painless we make submitting expenses (just text or email us the receipt), 30 minutes is the average time between a transaction and receipt/memo submission on Ramp. On legacy platforms, the average time between transaction and receipt submission is days – Ramp brings it down to minutes.
What market does Ramp target and how big is it?
Ramp is innovating the $100 trillion+ B2B payments market. The company serves companies of all sizes, from fast-growing startups to multi-billion-dollar enterprises and multi-generational potato farmers.
What’s your business model?
Ramp does not charge for its software and generates revenue from interchange fees.
How has the business changed since we last spoke?
Business growth:
- Revenue grew by nearly 10x in 2021
- More than 5,000 businesses on the platform, representing 7x growth YoY
- 15x cardholder growth YoY
- Powering over $5 billion of annualized payments volume on Ramp
With revenue and cardholders growing faster than the number of businesses on Ramp, we’re seeing deeper engagement from customers that sign up as they start to see time and money savings.
AI-assisted travel solution: In Feb 2022, we released our AI-enabled travel solution, which allows employees to book anywhere and Ramp will enforce your company travel policy in real time. It automates expense categorization, instantly compares charges against your policy, and auto-sorts all charges made with a Ramp card on a certain trip so employees don’t need to manually enter and finance teams have instant insight to their travel-related spending across their organizations in real time. Ramp for Travel also marked the introduction of our Lyft and Chrome integrations, which enable automatic and hands-free expense reporting from start to finish.
Automated expense reporting: New integrations for the Ramp platform extend our automated, hands-free and cost-saving technology across more areas of our customer’s business, including Amazon for Business, Lyft, Google Chrome, and Gmail. These integrations are incredibly powerful – purchases made with a Ramp card are automatically matched and uploaded into the Ramp system; no need to submit receipts at all.
What was the funding process like?
Our existing investors saw Ramp’s continued rapid growth, impact for customers and opportunity ahead, and as a result, wanted to increase their stake in Ramp. That interest kickstarted a round that was led by one of our staunchest supporters – the team at Founders Fund.
What are the biggest challenges that you faced while raising capital?
During a raise, distraction is easy to seep in. It’s important to never lose sight of delivering great outcomes for customers, and maintaining focus and long-term vision. A company’s bank account balance or its paper valuation don’t necessarily improve life for customers. We measure success by the quality of delivery for customers. At Ramp, we are laser-focused on getting the best outcomes for our customers. Put simply, are we saving them more time and money? Keeping focus when you’re scaling rapidly is an ever-present challenge.
What factors about your business led your investors to write the check?
We feel fortunate that our investors see value in our mission to fundamentally improve the way businesses manage and spend their money and proactively approached us about additional investment. Our growth shows that this vision is resonating in the market.
What are the milestones you plan to achieve in the next six months?
We recently announced the launch of Ramp for Travel, an AI-assisted travel solution that allows employees to book anywhere and gives finance teams an unprecedented level of insight and control over travel-related spending policies, and data. We look forward to announcing some exciting developments in the coming months. Our priorities include expanding into new verticals, launching other features that fully automate expense management, and building out our team.
What advice can you offer companies in New York that do not have a fresh injection of capital in the bank?
Before ever raising funding, develop real relationships with the investor community (in-person, or virtually when necessary) to engage others, get advice, iterate, learn and grow. Building relationships early, rather than waiting until you’re ready to start fundraising, is critical. Try to anticipate your investor’s needs and what it would take to make them say, “I’m bullish and want to put more money into this.” Make it as easy as possible for them to get the information they need.
Before ever raising funding, develop real relationships with the investor community (in-person, or virtually when necessary) to engage others, get advice, iterate, learn and grow. Building relationships early, rather than waiting until you’re ready to start fundraising, is critical. Try to anticipate your investor’s needs and what it would take to make them say, “I’m bullish and want to put more money into this.” Make it as easy as possible for them to get the information they need.
When we meet people, we’ll often ask for introductions or for advice about hiring. That helps shift the relationship from two people with potentially diametric interests, to being on the same side of the team. Think about how you can engage people who want to be a part of your journey and collaborate with you to build a company.
Where do you see the company going now over the near term?
In the short term, we plan to open an office in Miami, continue hiring at a strong pace, build out new products and services, and bring our offering to thousands of new companies spanning industries and size. We want to help companies grow into better, more profitable versions of themselves, through finance automation that maximizes the output of every dollar and hour.
What’s your favorite restaurant in the city?
Cafe Salmagundi – their brunch is outstanding!
