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Corporate credit cards are pretty much a dime a dozen, as long-established players such as American Express vie with newer VC-backed players such as Brex, Divvy, and Moss for businesses’ attention. To stand out against established players like Amex, it has become increasingly important to beyond offering a simple piece of plastic and differentiate under the hood.
Against this backdrop, New York-based Ramp launched in early 2020 as a comprehensive corporate credit card and automated spend-management platform that bypasses convoluted or duplicitous reward programs with the promise of saving companies money. To help, Ramp today confirmed recent rumors that it has raised $115 million in fresh funding from notable names including Stripe and Goldman Sachs at a valuation of $1.6 billion.
“Ramp’s unique differentiator is our savings-focused approach to spend management,” cofounder and CEO Eric Glyman told VentureBeat. “It is a well-known fact that complex rewards programs offered by incumbent corporate cards actually encourage businesses to spend more — ultimately hurting their bottom line. So we designed a corporate card aligned with the interests of our customers, which is time and money savings.”
Beyond the card
At a top level, Ramp is a corporate card like many others: Businesses distribute them to employees who use it for job-related purchases, and then everything is charged directly back to the company.
Businesses can get unlimited 1.5% cash back on their purchases, while Glyman says various automated smarts can save finance teams “hundreds” of hours each month. And it’s here, on the spend-management software side, that Ramp wants to make its mark.
Admins and managers can set individual spend limits on a per-employee level, stipulate spending rules based on company policies, and more. Using machine learning techniques, Ramp can identify duplicate spending — for example, if different teams are paying for the same software licences when a single licence should technically cover the whole organization. It can also flag “troublesome spend patterns,” surface partner rewards that might have gone unused, and even negotiate better rates with vendors, according to Glyman.
More broadly, Ramp leverages ML to power its savings insights feature, which combines transaction data with customer feedback to “… regularly deliver relevant and tailored savings insights for each customer,” according to Glyman.
Companies can also automate many of the laborious processes involved in managing their accounts, such as chasing missing receipts for expenses — they set a policy and Ramp automatically messages the employee to ask them to submit a photo of their receipt. Ramp then uses optical character recognition (OCR) to verify and match the receipts to transactions automatically.
Show me the money
The global pandemic has transformed entire industries, and the corporate expense sphere is no different. Travel booking and management company TripActions essentially had to pivot last year to a broader spend management platform incorporating travel and expenses, and a few months back it raised $155 million at a $5 billion valuation.
This is Ramp’s core value proposition. Sure, it’s a corporate credit card, but it also enables businesses to manage all of their corporate spending, powered by direct integrations with accounting software such as Quickbooks, NetSuite, Xero, and Sage Intacct.
“The biggest problem Ramp solves is financial software consolidation,” Glyman said. “As organizations grow, the tools they use to manage payroll, out-of-pocket expenses, [and] AP/AR creates burdensome manual processes for finance teams and a fractured view of companywide spend for executives. Ramp combines corporate cards, expense management software, reimbursements, vendor management, and reporting and analytics — all in one free package.”
The company said transaction volume on Ramp has grown fourfold over the past six months and is now at a run rate of $1 billion annually. But perhaps more interestingly, it said one-third of its customers, which include billion-dollar businesses such as Ro, Better, ClickUp, and Applied Intuition, switched from American Express, and more than 90% ditched existing spend management tools such as Expensify and Concur for Ramp’s offering.
Similar to others in this space, Ramp’s card itself is free and there are no transaction fees or interest. Ramp gets a cut from banks’ interchange fees, and it also plans to eventually make money from its own software platform as part of a SaaS subscription. “Ramp is currently free of charge — we are currently exploring seat-based pricing for our software offering,” Glyman said. “[There is] no set date on when we will launch new pricing.”
Ramp has now raised a total of $320 million in debt and equity financing since it was founded in 2019. Its latest cash injection was spearheaded by D1 Capital Partners and Stripe, with participation from Goldman Sachs, Founders Fund, Coatue Management, Thrive Capital, Redpoint Ventures, Box Group, Neo, and Contrary Capital, and Glyman already has plans for how the money will be allocated.
“We’re laser-focused on three areas of product development this year — more sophisticated workflow capabilities for mid-market and enterprise customers, payment consolidation for a wider swath of business expenses, and strategic partner integrations that will deliver customers a seamless experience across their IT, finance, and HR software stack,” he said.
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