Ramp Business Corp., a startup that helps companies issue corporate payment cards to workers and manage spending, is now valued at $8.1 billion after raising $750 million in new financing.
Of the $750 million in new financing that Ramp announced today, $200 million was equity funding provided by a group of more than a dozen investors. The lead backer was Founders Fund, the same firm that led the startup’s previous Series C investment. The group also included payment processing giant Stripe Inc., as well as major tech investors such as Coatue Management and General Catalyst.
Alongside the equity funding, Ramp raised $500 million in debt financing from Citigroup and Goldman Sachs.
Ramp’s new $8.1 billion valuation represents a notable achievement for the startup given that it was only founded in March 2019. The startup’s flagship product is a service that enables companies to issue corporate payment cards to workers. Ramp doesn’t charge card fees and provides 1.5% cashback on every transaction.
The startup makes money by selling software tools that help organizations manage business spending. A firm can set spending limits on company-issued Ramp cards and track business expenses through a centralized interface. For large transactions, Ramp provides the ability to require that a manager approve a purchase before it goes through.
In the 12 months that preceded today’s funding announcement, Ramp significantly expanded its feature set. The startup introduced a service called Ramp for Travel that helps organizations manage expenses related to workers’ business trips. It also rolled out Bill Pay, a tool for paying suppliers, and acquired a startup called Buyer that helps firms negotiate lower prices when buying products such as software.
Ramp’s investments in feature development have paid dividends. The startup disclosed today that its revenue grew nearly 10 times in 2021, though it didn’t share specific numbers, while the number of workers using Ramp cards increased by a factor of 15 in the same time frame. More than 5,000 companies now use the startup’s products.
One of the reasons Ramp’s products have proven so popular is that they promise to save a significant amount of time for corporate finance teams. According to the startup, companies using its software can close the books in eight hours instead of the week or more the task often requires.
Another element of Ramp’s value proposition is that it promises to help companies reduce business expenses. Besides providing 1.5% cashback on purchases made using its cards, the startup also offers a feature that highlights unnecessary expenses such as unused software licenses. The startup claims to have delivered more than $135 million in cost savings for customers since launching.
Ramp told TechCrunch that it plans to continue growing its installed base by moving into new verticals and developing more software features, with a particular focus on automating manual accounting tasks. The startup also intends to explore acquisition opportunities.
“We are pursuing an extraordinary opportunity to overhaul an industry that historically has been misaligned and out-of-touch with the needs of its customers,” said Ramp co-founder and Chief Executive Officer Eric Glyman. “Since day one Ramp has been designed to save our customers time and money, which is fueling our rapid growth.”
Ramp’s new $8.1 billion valuation signals that its investors believe there are major growth opportunities ahead despite the significant competition in the corporate spend management market. Startup Pleo Technologies Ltd., which also provided spend management software, received a $4.7 billion valuation last December. Earlier, corporate credit card specialist DivvyPay Inc. was acquired by Bill.com LLC for $2.5 billion.
Ramp’s strategy of moving into new segments by extending its feature set not only enables the startup to grow its addressable market, but helps it set its platform apart from rival solutions. In a blog post, CEO Eric Glyman detailed that Ramp plans to introduce “flexible capital solutions for e-commerce” as well as “new automation, innovative financing, and integrated services” as part of its roadmap.