This release in Benzinga discusses the New York-based 2019 startup called Ramp, which has reached unicorn status at $1.6 billion with a new capital infusion of $115 million from various sources. The company profiles itself as a technology company that develops corporate cards designed to save money for businesses.
So this very new firm seems to have climbed the valuation ladder fairly quickly. Ramp is a sponsored issuer of corporate cards, with new and better ways of delivering cost savings in such programs.
‘The round brings total venture and debt financing raised by Ramp to $320M. With a valuation of $1.6B, Ramp has become the fastest growing New York based startup in history, and the first to surpass a $1B valuation in under two years from incorporation….”Ramp has quickly become a key player in the financial services ecosystem by challenging business practices and assumptions that have existed for nearly 50 years,” said Dan Sundheim, Founder and Chief Investment Officer of D1 Capital Partners. “The company attracts new customers by providing value and savings, and empowers CFOs and finance teams to operate at a higher level of efficiency. We look forward to supporting Ramp during its next phase of growth.” ‘
Now the interesting thing is that due to the lockdowns and lack of business travel during most of 2020 and into 2021, corporate card spend across industries has declined substantially, at least in the traditional ways that corporate cards are used, for T&E that is. So Ramp seeing large growth in spend (from a smaller base of course) is bucking the trend.
Since we have not received a detailed briefing we don’t know specific reasons, but a quick view of the website suggests that Ramp is targeting other startups with their pitch and product, and therefore is seeing fresh spend. The appeal of mobile apps, virtual cards and automated expense management has legs, especially with demographic turnover in the workforce.
We also expect that some of this volume is associated with MRO spend that would normally be categorized as P card spend. However, still impressive.
‘Over the past six months, transaction volume on Ramp has grown by approximately 400%, and is nearing annualized transaction volume of $1B. Whether at fast scaling unicorns like Ro, Better, ClickUp, Applied Intuition and more, or at more traditional businesses seeking higher financial efficiency, Ramp has quickly become the spend management platform of choice. A third of Ramp customers switched over from American Express, and more than 90% of customers adopted Ramp as a comprehensive spend management platform, replacing Expensify, Concur or manual solutions. Ramp has saved its customers over $10M through its proprietary software that identifies ways for businesses to spend less on purchases and an additional 5.4 days a month in administrative work for finance teams.’
Overview by Steve Murphy, Director, Commercial and Enterprise Payments Advisory Service at Mercator Advisory Group