Every company represents a complex web of inflows and outflows. Managing a company’s expense account can be death by a thousand cuts for many businesses. For example, the average company spent $9.6K per employee annually just on SaaS subscriptions as of 2023. As an industry, global software-as-a-service spend is projected to grow to $232 billion by the end of 2024, an 18% increase from $197 billion in 2023.

Managing tens of thousands in expenses may be mundane, but it's an ever-present part of any business someone has to manage, and a lot of inefficient costs both in time and money can arise from the complexity of expense management. Many businesses still use paper receipts or spreadsheets to manage their expenses. These methods are inefficient, expensive, and error-prone. In 2022, it was found that one in five expense reports contained errors and it cost $52 to fix each expense report.

Software has become an integral part of managing financial services. In a 2021 survey, 88% of US respondents said they use technology to manage their finances, a notable increase from the 58% who responded the same way in 2020. Meanwhile, the market for expense management software was valued at $6 billion in 2021, and $1.5 trillion was spent on corporate cards in 2022, with an increase to $1.9 trillion in 2023. In 2020, the global corporate card market was valued at $32.3 billion and was expected to grow 7.3% through 2026. This growth is being driven by an increase in businesses moving towards non-cash payments for better visibility and control of their expenses.

In 2023, the expense management software market increased to $7 billion and is expected to grow from $7.7 billion in 2024 to $15.1 billion by 2032, representing a CAGR of 10.2% during the forecast period. Meanwhile, the business spend management software market was $17 billion in 2022, and is expected to grow to $39 billion by 2029 at a CAGR of 11.1%. The increase in spend is expected to come from increased usage of cloud solutions, new AI tools, and spend analytics.

Ramp* is a fintech company that provides a suite of products designed to automate companies’ finance operations. Ramp’s expense management software automates receipt capture and reporting, eliminating manual tracking. It also provides corporate cards and offers solutions for bill payments, vendor management, and procurement operations. Its products are intended to increase spending policies and allow businesses to adopt smarter spending policies while cutting down on waste from manual expense management processes. As of March 2023, Ramp said that it had saved its customers $400 million and 5.8 million in hours of labor in the years since it was founded.

Ramp was founded in 2019 by Eric Glyman (CEO), Karim Atiyeh (CTO), and Gene Lee. Ramp co-founders Glyman and Atiyeh first met as classmates at Harvard and then launched their first company, Paribus, out of school. Paribus, co-founded by Glyman and Karim Atiyeh in 2014, aimed to help regular folks find and make use of better deals they might have missed out on. They got the idea from Glyman's time working at Express where prices kept changing (a dress shirt could be 20% off one day and 50% off the next day), and from a time when he felt annoyed after booking plane tickets and then realizing the price dropped later. Paribus allowed users to track prices and get refunds automatically.

Not long after Paribus had been founded, Capital One showed interest. Capital One’s credit card division acquired the company in 2016, just months after it had completed YC. At the time, the company had roughly 700K users and had saved consumers over $100 million. While Glyman and Atiyeh were at Capital One, they worked closely with Gene Lee, who had been one of their software engineers at Paribus. Lee would become Ramp’s third co-founder.

In March 2019, Glymen and Atiyeh left Capital One to start a new venture. In an interview, Glyman described the origin of Ramp, saying: "We had this idea of, ‘What if your credit card could help your business spend less money?’”. The two of them reportedly spoke to 100 entrepreneurs and finance experts before launching such a card and found that clients were even more interested in saving time than money because the process of expensing was so broken and inefficient. This realization gave rise to the idea for Ramp, a product to both make the expensing process more efficient and a corporate card tailored to provide perks that businesses want.

From its founding in 2019 to July 2023, Ramp scaled its team to over 400 employees; by April 2024, this had risen to 730 employees. The company built its early team with the mindset that everyone ought to think like a founder: out of the first 60 employees, one in every three people was a former founder. The founders took debt at first to help early hires buy founder shares, and always emphasized the long-term relationship they would have with their team members. Eric Glyman, Ramp’s CEO, put it this way:

Early on, Ramp attracted top executive fintech talent, former founders, and award-winning programmers. It also became a landing spot for young talent in or out of university. The founders have described their aspirations for the company to be a learning ground for a future generation of founders. That culture is one aspect of the company that the founders have ascribed to contributing to the company's product velocity:

Every transaction over the course of a company’s life represents a massive web, from paying for the smallest box of paper clips to multimillion-dollar vendor deals. When thinking about Ramp’s product vision, it's necessary to go deeper than simply looking at the Ramp card through which some of those transactions flow. Ramp's vision is to become the center of gravity in a company’s transaction layer and leverage that position to identify every meaningful node within each customer.

Source: Contrary Research

While the initial vision is to extend into several areas of the finance stack and tackle processes like travel, or expense management, the long-term vision is focused on automation. As CEO Eric Glyman put it:

Keith Rabois, who invested in DoorDash, Affirm, and Stripe, and led several funding rounds for Ramp, said in March 2022 that “Ramp’s product velocity is absolutely unprecedented in my 21 years working with technology businesses.” That product velocity funnels into a suite of products Ramp describes as helping companies (1) start (cards, expense management, and bill pay), (2) scale (manage expenses policies and visibility), (3) streamline (accounting automation and integration), and (4) save (both time and money).

Corporate Cards

On average, companies spend $80 per employee per year ordering business cards. If a company has 150 employees, this would add up to over $12K per year. Ramp’s first product was a simple VISA corporate card with unlimited 1.5% cash back on all transactions. The Ramp card is free to use and does not charge any card replacement fees, late fees, or interest. As of May 2024, alongside the 1.5% cash back, Ramp customers have access to $350K in perks as part of partnering with the platform. Ramp does not charge interest on balances, because the issued corporate cards are charge cards.

Source: Ramp

Ramp customers can issue virtual cards or physical cards, Virtual cards can be issued in unlimited quantities and are easy to transfer between users. These virtual cards can also be added to Apple or Google Pay for in-store purchases. Physical cards are individual to a user, and at any time only one can be active. Most corporate cards are enrolled in 3D secure (3DS) payment. 3DS is a common credit card authentication method that's used for Strong Customer Authentication (SCA). SCA is a European regulatory requirement to reduce fraud and improve security for online and contactless payments. This means Ramp’s physical card can be used internationally without worry.

Ramp allows businesses to block or restrict spend by specific vendors or categories and allows businesses to enact precise controls including spend limits by frequency and auto-lock dates for every card. As of May 2024, Ramp was also beta testing shared limits for tracking group spend. As Ramp described it:

The feature allows authorized employees to spend from the same pool of funds, with visibility on who is spending on what. For example, a head of marketing can allocate a budget to plan an event that can be shared amongst multiple employees.

The inspiration for Ramp's card offering came out of Glyman and Atiyeh's experience working at Capital One:

As a result, Ramp aimed to build an easy-to-use card, and over time extended its platform to include software that would focus on helping companies spend less and keep more money in their bank accounts.

Expense Management Software

With Ramp’s expense management software, companies can effectively manage employee spending in one centralized dashboard. Each component of the product is built to save both time and money. With the combination of both its card and software products, Ramp is more deeply integrated into the financial rails of its customers.

As part of its base product offerings, Ramp offers customers the ability to build out complex and flexible approval chains for different conditions under expense approvals. The workflow approval building is initialized using one of a number of requirements that can be layered and nested to create the desired approval routing. Amount and employee role-based routing is available to all customers. However, there are unique fields offered solely to Ramp Plus customers

Receipt Matching

Source: Ramp

Often, when expense management software is divorced from transactions themselves, users find themselves with a pile of receipts each month that need to be input into the software manually. To prevent this, Ramp focused on building more robust optical character recognition (OCR) to automatically ingest even the hardest-to-read receipts to achieve over 90% accuracy.

It also aims to send triggers right at the time following a transaction which is intended to ensure easier and more timely transaction logging. Ramp's software is therefore intended to make expense management as simple as it can for the individual user. Further, when a user spends with their Ramp card, if a receipt is required, they can attach it alongside any relevant notes or categorizations as a memo via several different options like SMS, email, Ramp.com, mobile app, or Slack integration.

A feature launched in Q1 2024 and in beta as of May 2024 is that using Ramp Intelligence, Ramp will automatically suggest a few memos via SMS that users can select from under specific conditions.

Source: Ramp

As another time-saving feature, Ramp also enables customers to create auto-generated receipts, and digital versions of paper receipts for card transactions under $75 (the threshold for IRS compliance). The information for the receipt is sourced via information captured at the point of sale (POS) or payment. For example, when a customer purchases at a retail store, the POS system captures transaction data such as the date and time, items purchased, prices, discounts, and payment method. This information is then sent to the merchant's payment processor, which may generate an automated receipt.

Source: Ramp

As part of compliance and receipt matching, Ramp prevents finance teams time from having to verify receipts manually. If a transaction and its fields pass at least two out of three checks for the amount, date, and merchant, Ramp will “auto verify” the receipt.

Source: Ramp

Ramp also enables users to automatically send receipts via integrations with Gmail, Outlook, Amazon Business, Lyft, and Uber that allow for automatic receipt collection, a feature that Ramp claimed in June 2022 had saved customers “more than 1 million hours.” This feature works by using image recognition technology on receipts in Microsoft Outlook or Gmail inboxes. Once it does this, the transaction is automatically coded, and the finance team of the company using this feature can verify the coding is correct and sync the transaction with its accounting provider.

Ramp’s software is designed to deliver on the founders' original vision of creating a place for central oversight over spending. Within Ramp’s expense management software, administrators can automatically set policies, make approvals, and enforce spending limits in real time, deciding when and how much money can be spent. Ramp reduces friction between managers and employees by automatically sending reminders for missing items, requesting repayments, and auto-lock cards for non-compliant employees.

Corporate Travel

Source: Ramp

In February 2022, Ramp launched its corporate travel tool. In line with the company's north star of saving users time and money, Ramp allows users to book travel from whatever platform they prefer and – because they have control of the card – can enforce travel expense policies before any travel gets booked.

Source: Ramp

Some examples of travel policies that can be set include the following:

• Maximum airfare cost and hotel nightly rate

• Flight booking class allowed based on flight time

• How long in advance you need to book

• Maximum daily spend on meals (per diem)

Traditional corporate travel management platforms require users to use a separate interface to make sure policies are followed. One way of thinking about Ramp’s approach is that it treats the transaction as the interface. As Packy McCormick explains:

Source: Ramp

Ramp’s Travel Dashboard enables customers to see company travel spend and details live. There are three main sections:

1. Map view: active and upcoming trips can be seen on the world map, with bubbles that can be clicked on to provide trip details.

2. Metrics view: a summary of travel spending over a period of time, including a breakdown by categories (flights, hotels, per diems, transit), top spenders, merchants, largest trip expenses, and more.

3. Trips view: a bird’s eye view of active, upcoming, and completed trips.

For companies that require managed travel solutions, Ramp has partnered with Melon and TravelPerk to automatically send a receipt and itinerary information directly into the Ramp platform once travel is booked.

Accounting

Source: Ramp

With the core guiding ethos of Ramp’s product, the focus on saving time and money extends not only to when the money is spent but to the accounting process on the back end as well. Ramp has claimed that, on average, companies close their books five times faster with Ramp, going from a process that can take 2-3 weeks and shrinks it down to about an hour. It also says it saves finance teams 5.4 days per month and can save over $100K per company.

The product includes automated policy enforcement, invoice management, and accounting connections to platforms like Quickbooks and Xero and for Ramp Plus customers Netsuite, and Sage Intacct. For all other providers that Ramp does not yet have a native integration with, Ramp offers a universal CSV.

Once a customer is connected to accounting, Ramp pulls in cleared transactions and approved reimbursements. A transaction can then be coded and exported to a desired format. Universal CSV offers the ability to import any field from an accounting provider to be coded within Ramp, an open text field that allows bookkeepers to fill in according to company policies, and a “required field for syncing” which ensures that data can be reconciled between platforms.

Beyond streamlining the accounting process, Ramp also emphasizes integrations to make the overall process as easy as possible. Some of those integrations are as simple as connecting to a Gmail or Outlook account to automatically identify invoices and receipts. Ramp also partnered with Amazon for Business, allowing customers to connect their Amazon Business account to Ramp. Anytime an employee uses one of its cards to make a purchase, Ramp automatically pulls the receipt.

Bill Pay

In October 2021, Ramp launched its Bill Pay module. The majority of Ramp’s existing product suite revolves around individual employee card spend such as subscriptions, travel, etc. Bill Pay is one of Ramp’s first products to extend to the broader portfolio of spend. Bills are typically paid through a very manual accounts payable (AP) process.

Source: Ramp

For businesses, bill payments represented 75% of discretionary spend, on average, as of 2021. Ramp has taken a 15-minute manual process and automated everything from the point the finance team receives the invoice through closing the books, resulting in an automated 60-second process.

Pushing beyond the automation of the Bill Pay process, Ramp also broadened the flexibility with which customers pay those bills. Bill Pay provides automatic syncing of bills and payments between Ramp and a customer’s choice of accounting software. This occurs whenever a bill is created, after every update, and when the payment has been made.

Bill Pay can be set up in the same way standard reimbursement and transactions in the expense management product can. The difference lies in the setting conditions, amount-based routing is available to all Ramp customers, and other more specific conditions are only available to Ramp Plus customers. To make this process simpler, as of May 2024, Ramp has two pre-configured approval templates based on common approval flows:

1. Bill Pay vendor and department owner approval: this template is available to all ramp customers. This allows customers to require the vendor owner, department owner, and then an amount trigger that will require an admin to approve.

2. Bill Pay approvals by departments: this template is only available to Ramp Plus customers as it uses the Ramp department condition to route approvals.

Ramp provides vendor tax support as well. Bill Pay users can add and store their vendor’s W9 information directly in Ramp and export that information for easier 1099 processing at year-end.

In August 2022, the company launched Ramp Flex, where users can elect to have Ramp pay their bills up-front and can choose when to pay Ramp back (30, 60, or 90 days later.) That flexibility is intended to create additional breathing room for companies who are trying to manage their working capital between what bills are due and what cash they need to run their business day-to-day.

In response to its customers increasing international spend by 5.6x year-over-year in 2022, Ramp started supporting cross-border bill payments, flexible financing, and employee reimbursements globally across 195 countries and 40 currencies as of May 2024. Ramp also supported same-day ACH bill payments for a $10 flat fee as of May 2024. For vendor payment using Bill Pay, there is a $20 flat fee on international payments made via SWIFT USD. While it takes between 1 to 5 days for a vendor to receive payment, international payment timelines are more variable.

Vendor Management

Ramp provides a platform for users to manage vendor records in Ramp. Vendors paid via Ramp card or Ramp Bill Pay are recorded here. This tab simplifies storing, analyzing, and discovering vendor records and data.

Source: Ramp

When a transaction to a vendor occurs, it is added to the vendor management tab which provides an overview of spend. Clicking on a specific vendor will provide more details like recent bills or card transactions.

Source: Ramp

Ramp also allows customers to upload key documents associated with the vendor like contracts, form W-9s and other tax information, payment instructions, and more. For Ramp Plus customers, admins or bookkeepers can add custom fields, to build a source of truth for vendors on Ramp.

Source: Ramp

Vendors can be created either during the bill creation process or on the vendor management page. The “Vendor Owners” feature is an important part of the process; it represents a way to assign responsibility with and pay to a particular vendor. This view highlights this relationship and allows users to manage and create vendors. There is also an ability to bulk upload vendors using a CSV template provided by Ramp.

Contract Parsing

If the selected file is a contract, Ramp has the ability to parse the contract and extract key details like contract amount, payment frequency, and contract start or end dates. Users also have the ability to set reminders to the vendor owner 30 or 60 days prior to the last day to terminate or the contract end date (whichever may come first). This is being released in a phased approach as of May 2024.

Source: Ramp

Price Intelligence

Ramp also has a Price Intelligence feature that is accessible through the Vendor Management Tab. It uses “spend data from thousands of Ramp customers and millions of Ramp transactions” to give users the ability to compare what they’re paying for software against others.

When users upload contracts, invoices, and receipts or transact payments, Ramp processes the associated data and applies a variety of analyses to the data including LLMs developed by OpenAI to generate its intelligence. As of May 2024, Ramp supports price intelligence for the following vendors:

Source: Ramp

Procurement

In August 2023, Ramp acquired AI-powered startup Venue to expand into the procurement space in an attempt to focus on more complex enterprise customers. Commenting on the acquisition, Ramp said that it believed that back-end business processes like procurement were “ripe for practical automation and AI implementations”.

Available to Ramp Plus customers, Ramp procurement lets users capture purchase requests in one place, loop in approvers, and manage purchase orders (PO) within a unified platform.

Source: Ramp

Admin users can also customize their procurement forms and specify question types from a given list of options.

Source: Ramp

To streamline the intake process, questions can be conditionally asked, and eventually, the form responses can be mapped to purchase order fields.

Source: Ramp

Further, the visibility, approval policy, and payment method of a procurement spend program can be customized.

Source: Ramp

Once a procurement program is created, a new view exists in the main navigation of the dashboard. In this tab, an admin can:

• View all requests, drafts, and requests that need approval and pending requests

• View all open, partially billed, fully billed, and closed purchase orders (PO)

These POs can be synced into a customer’s accounting system from within the POs tab. These POs can be customized as per a customer’s needs as well.

Source: Ramp

Ramp also allows customers to match invoices between Ramp Bill Pay to POs created in Ramp. If there’s an exact match for the Ramp, it will be automatically matched, otherwise options will be suggested. This matching then cascades down to invoice line items with PO line items.

Source: Ramp

In January 2024, Ramp released Seat Intelligence which remained in beta as of May 2024. Seat Intelligence tracks software usage against the number of seats businesses are getting billed for through its Okta integration to ensure that businesses are getting the desired value from SaaS contracts.

Integrations

Ramp integrates with a wide range of apps to streamline customers’ finance operations. Ramp has over 1K integrations including apps like Gusto, Microsoft Teams, Slack, Okta, 1Password, and Google SSO.

Ramp’s priority referrals program also lets customers quickly open new accounts with banks in its network of 80+ partners. These connections allow customers to diversify their funds across multiple bank accounts while centralizing payments and enabling real-time visibility into their cash flows.

Visibility

Part of Ramp’s flywheel includes driving customer growth, which leads to more insights with the goal of making Ramp’s products notably faster, more user-friendly, and better at saving money than a typical expense management tool that mostly only addresses the customer’s need to save time.

Source: Ramp

Ramp can also identify duplicate and unused subscriptions as well as partner rewards that aren’t being taken advantage of. Overall, this is intended to provide a sense of how spend behavior is trending. In August 2021, after raising its Series C, Ramp announced that it had acquired Buyer, a negotiation-as-a-service startup. According to Ramp, customers working with Buyer “saves clients an average of 27.3% on big-ticket purchases like annual software contracts.”

Ramp Plus

In August 2023, Ramp announced the launch of Ramp Plus, which is intended to help "growing companies with their most complex financial operations" with an "all-in-one functionality" with several offerings.

The company stated in its launch announcement that the product would be available as an optional, paid plan starting in September 2023, but that "as a thank you to our early customers", existing SMBs and mid-market business customers will receive a free upgrade to Ramp Plus for one year. The company also stated that Ramp's core product offering (the card and bill payment software) would remain free.

Procure-to-pay: this offering is an automated, customizable procurement solution intended to allow customers to "control spend and manage the full procure-to-pay process". It enables customers to have all spend requests in one centralized location which can be approved by the appropriate teams, and also to track purchase orders until they're paid.

Global expenses: Ramp Plus allows users to consolidate both domestic and international spend with support for a range of currencies, tax reporting systems, and debiting systems for the UK, CAD, and the EU.

Workflow builder: This offering allows users to build customizable, rules-based workflows for use cases such as automated employee onboarding, procurement, and payment approvals.

Self-enforcing smart policies: Ramp Plus is further designed to allow for automated controls and policy enforcement; for example, employee cards can become auto-locked when they have failed to submit receipts. Another example is "smart transaction reviews", which will automatically flag expenses that are outside policy.

Ramp Tour Guide

Source: Ramp

In May 2024, Ramp announced the forthcoming launch of Ramp Tour Guide, which is an AI agent that will educate customers on how to navigate and accomplish their tasks. Users can prompt the tour guide with a question and navigational elements will appear across the platform to navigate users to their desired results. This feature is built on top of OpenAI’s GPT-4o model.

Customer

Ramp began with a focus on small-to-medium-sized businesses (SMBs) but grew to work with companies of all sizes — from farming businesses to multi-billion-dollar enterprises. Ramp also cuts across industries, working with those in fashion, e-commerce, defense, transportation, healthcare, software, creative services sectors, and more.

For most financial products, breaking into larger enterprises is often the most challenging thing to do given the complexity of their financial processes. In October 2021, Ramp CEO Eric Glyman was asked during a podcast episode whether Ramp’s product could serve “large corporations like Microsoft, Amazon, IBM…?” Glyman's response was “we do have one of the companies you mentioned there using it.”

Ramp’s product has become increasingly modular. With the launch of its bill pay product, it even has some customers who start using Ramp not for the corporate card, but just for bill pay. The combination of easy-to-use software for SMBs, integrations with an existing tech stack for startups, and enterprise integrations with tools like Netsuite and Workday enables Ramp to flex up and down in terms of customer size. An example of this flexibility and ability to support large-scale organizations is that as of August 2023, Ramp became the sole expense management provider for Shopify.

Notable customers of Ramp as of May 2024 included Shopify, Taskrabbit, Webflow, Glossier, Barry's, Eventbrite, Discord, and Anduril.

Market Size

Software has become an integral part of managing financial services. In a 2021 survey, 88% of US respondents said they use technology to manage their finances, a notable increase from the 58% who responded the same way in 2020. When discussing Ramp’s addressable market size a key focus is on business spend. Businesses spend over $120 trillion each year globally as of 2022, but only $1.5 trillion was spent on corporate cards, which is expected to grow to over $6.8 trillion by 2026.

While there are a number of pockets of business spend that Ramp continues to build its platform towards, its existing suite addresses a large swath of expenses. Corporate cards like AmEx, for example, generated $60.5 billion in annual revenue in 2023. Meanwhile, the global business travel market was valued at $901.5 billion in 2022 and was expected to grow to $2.5 trillion by 2032, a 10.8% CAGR. Meanwhile, BILL (formerly Bill.com) processed $69.1 billion in transaction volume in Q4 2023 alone.

Across corporate cards, business travel, and bill pay, Ramp is tapped into several trillion dollars worth of spend. The question now is one of execution. Most of the incumbent providers in these categories are fairly entrenched. Ramp’s product flywheel will have to continue to spin to effectively penetrate these large existing pools of spend.

Corporate Cards

AmEx: American Express or AmEx for short is a public company traded on the NYSE (AXP), and as of May 2024, it has a market cap of $179 billion. It was founded in 1850 and competes with Ramp’s corporate card. By comparison, Ramp’s corporate card product offering could be seen as more diverse and thorough. Although AmEx cards tend to have lower spending limits, they require personal guarantees and have $100+ annual expense fees whereas Ramp does not charge fees. As of May 2024, AmEx and Ramp both offer physical cards. Ramp says its differentiation from AmEx stems from the fact that it provides unlimited virtual cards, 1.5% cash back, integrations, free expense management software, expense and accounting automation, and automatic onboarding.

Brex: Brex is an expense management platform that combines corporate cards, expense management, travel, and business accounts. Founded in 2017, Brex has raised a total of $1.5 billion including a $725 million Series D round ($425 million in a Series D-1 in April 2021 and $300 million Series D-2 in May 2022) at a valuation of $12.3 billion. As of May 2024, Brex had an estimated valuation of $4.1 billion in secondary markets. Like Ramp, Brex provides syncing with modern ERP systems, physical, and unlimited virtual cards. Ramp claims it differs from Brex in that it offers procurement, price intelligence, guest roles for temporary users, and flat fees for advanced user functionality independent of location. Ramp also says it offers a 5% average savings with cashback and savings insight that Brex does not provide. Meanwhile, Brex claims that its offering is differentiated from Ramp in that it offers a cash account with FDIC and treasury, in-app travel booking, and cards without foreign transaction fees.

Spendesk: Spendesk provides company cards and software to help companies manage approvals, budgets, and accounting automation. Founded in 2016, Spendesk has raised a total of $312 million, including a $232 million Series C round ($118 million in a Series C-1 in July 2021 and $114 million in a Series C-2 in January 2022) at a post-money valuation of $1.2 billion as of May 2024 with Tiger Global leading the round. Both Spendesk and Ramp offer cards and integrate with existing financial and accounting systems to speed up visibility and management. However, Spendesk offers comprehensive spend management with a strong emphasis on automation and employee expense tracking. Ramp offers this with a bigger focus on providing advanced analytics and insights into spending patterns alongside automation.

Extend: Extend provides virtual company cards and software to help companies manage payments and expense processes. Founded in 2017, Extend has raised a total of $55 million as of May 2024, including a $40 million Series B round in October 2021. As of May 2024, Extend supports integrations with nine banks, compared to Ramp’s 80+. Its focus is to build upon existing corporate credit cards, without needing additional bank-issued cards. Ramp does the same but has a broader scope with features in areas like accounts payables, procurement, and vendor management. In 2021, American Express also announced a partnership with Extend to offer SMB business card customers access to virtual cards.

Rho: Rho offers corporate cards, expense management, AP automation, business banking, accounting automation, and treasury management. Founded in 2018, Rho has raised $205 million in equity and debt financing, with a $75 million Series B round in December 2021 led by Dragoneer Investment Group. Rho claims that it differs from Ramp in that it offers a Treasury solution that helps customers invest excess cash in short-dated government securities. This comes with a Treasury Management Account that provides $75 million in FDIC deposit insurance per entity.

Expense Management Software

SAP Concur: SAP Concur is an expense management platform for managing travel, expenses, and invoicing. Founded in 1993 and previously known as Concur Technologies, SAP bought Concur in 2014 approximately $8.3 billion and renamed it to SAP Concur. As of May 2024, It does not provide a consolidated offering for corporate cards, spend management, and accounts payable like Ramp does, nor is there real-time finance reporting with streamlined search and filtering. Ramp also provides its customers with an automated employee reminder for receipts and instant receipt matching, in contrast to SAP Concur.

Expensify: Expensify (NASDAQ: EXFY) provides expense management to automate accounting processes for expenses, bills, and invoices. It was founded in 2008 and had a market cap of $130.6 million as of May 2024. Ramp and Expensify share similarities in product offerings. Ramp claims that it is differentiated from Expensify in that it automates receipt capture to replace email forwarding and has free expense reimbursements, whereas Expensify claims to have more flexibility when it comes to expense approvals, delegated access, and integrations at an individual per-card export.

Airbase: Airbase provides an expense management platform to manage non-payroll spending. Founded in 2017, Airbase has raised a total of $251.5 million as of May 2024, having raised a $150 million debt financing round led by Goldman Sachs in July 2022. While Airbase claims that it excels in detailed control and advanced features, Ramp sees itself as being at an advantage for its ease of use and focus on automating financial tasks to save time and reduce costs. Airbase seems to go deeper into the expense management categories, while Ramp seems to be more breadth-focused and covers common high-level functionality at companies.

Bill Payments

BILL: BILL is a platform that provides a way to create, pay bills, send invoices, manage expenses, control budgets, and access credit for business growth. Founded in 2006, BILL (NYSE: BILL) has a market cap of $6.4 billion as of May 2024. Ramp contrasts its bill payment product to BILL in that it offers the ability to seek financing with extended payment terms of 30, 60, or 90 days, and the ability to manage a full procure-to-pay process with central intake.

AvidXchange: AvidXchange (NASDAQ: AVDX) serves middle-market businesses by providing accounts payable automation software. Founded in 2000, as of May 2024, AvidXchange has a market cap of $2.3 billion. An important difference between the two platforms is that AvidXchange runs a quote-based system whereas Ramp provides transparent pricing.

Stampli: Stampli’s platform allows finance teams to access accounts payable communications, documentation, and payments in a single solution. Founded in 2015, Stampli has raised a total of $146 million as of May 2024 with notable investors including Blackstone, Insight Partners and others. As of May 2024, Ramp offers same-day ACH payments, whereas Stampli processes ACH payments between 3-5 days, and international payments on Stampli are difficult to process whereas Ramp makes it very simple. Stampli offers integrations with over 70 ERPs, which is more than the number of ERP integrations that Ramp has.

Corporate Travel

Navan (formerly TripActions): Navan is an end-to-end travel management platform for corporations with booking, tracking, reporting, and expensing tools. Founded in 2015, Navan has raised $2.2 billion in funding as of May 2024, and the company raised a Series G round at a $9.2 billion valuation in December 2022. It competes against Ramp’s product offerings that help customers book and manage spend on travel. Ramp entered into this space when it launched in March 2022.

TravelPerk: TravelPerk is a travel management company that provides business travel solutions for companies. As of May 2024, TravelPerk has raised $530 million in funding from investors, having raised a $104 million Series D-2 at a $1.4 billion valuation in January 2024 led by SoftBank, led by SoftBank, with participation from Kinnevik and Felix Capital. TravelPerk reported that it booked $2 billion in revenue in 2023 and grew revenue at 70% YoY in travel spend under management.

Some of these products have extended into other categories as well, as was the case with Navan launching expense management or Airbase launching corporate cards. Ramp has some customers who have replaced several tools (i.e. BILL, Expensify, AmEx) in favor of centralizing on Ramp’s platform.

Expanding further into the Bill Pay market could prove a formidable battle for Ramp. Corporate cards are more commoditized, especially since different cards' rewards programs represent a race to the bottom as companies try to compete for customers. Bill Pay, on the other hand, has a push-and-pull relationship. While users can decide what card they use to pay for things by themselves, Accounts Payable and Accounts Receivable have other parties involved. Packy McCormick described that dynamic in March 2022 as follows:

Ramp’s ability to differentiate will depend not only on continuing to launch high-quality products but products that are feature-rich enough to attract customers away from some well-established network effects within their existing vendors.

Ramp's Differentiation

Early on, Ramp saw the advantage of having an integrated card program and expense management software. In early 2021, Ramp saw more than 90% of its customers start using their cards and completely switch over to their software as well. CEO Eric Glyman described the benefit of centralization this way:

Card-driven models will focus on extensive programs to increase card spend and more effectively monetize. Software-driven models are fairly sales and marketing-heavy, requiring a higher sticker price to justify the acquisition cost of those customers. Ramp’s competitive positioning has been to offer both the card and the software for free.

Source: Ramp

As of May 2024, Ramp has three pricing tiers:

1. Ramp (no cost): This plan offers unlimited cards and smart controls, access to automated expense management, vendor management and accounts payable, accounting software sync, and real-time saving insights.

2. Ramp Plus ($12 per user/month - billed annually): This plan offers everything that Ramp offers with custom controls and advanced user roles, unlimited customizable workflows, procurement automation and PO management, advanced ERP integrations with multi-entity support, and international capabilities, with multi-currency card limits and spend programs.

3. Enterprise: It offers everything the previous tiers have with custom dedicated implementations, premium support, enterprise ERP integrations, local card issuance, SOX compliance customizations, and more.

Ramp provides its base products for free without any subscription or annual fees. Besides the subscription for Ramp Plus, Ramp monetizes with interchange fees. Ramp takes a cut from merchants for every transaction made using a Ramp card. That cut is then divided between the card network (like Visa) and the merchant’s bank. In addition, the company states that it "may also make money from other features and services, like international bill payments, negotiations and Flex."

The status quo for most cards involves taking various pieces from each transaction. Each cut goes to a variety of players in this process, and every card swipe involves requests passed to a card network (e.g. Visa, Mastercard) through to the issuer (i.e. the bank that’s funding the consumer’s transaction).

The issuer of the card will then either approve or decline the transaction based on the availability of funding. Issuers therefore bear the brunt of the risk, because if something is wrong and the consumer ends up not paying then the issuer is on the hook with the merchant. The issuer “credits” the merchant for a percentage of the original transaction request, but not the full amount. Each transaction takes into account a number of fees like interchange and network fees. Credit card processing fees (which encompass interchange fees) are usually in the range of 1.5%-3.5%, which means that for a $100 transaction, fees can range between $1.50-$3.50.

Some of the participants taking a cut in that transaction include the merchant bank and the card network, but the majority goes to the issuer because they’re taking the risk. Ramp’s model is fairly simple. It partners with Sutton Bank (which issues the Ramp Visa Commercial Card) and Celtic Bank (which issues the Ramp Visa Corporate Card) as its “acquiring bank” to manage transactions.

Generally, banks expect ~1.5 - 2.5% (i.e. 150-250 bps) in interchange, so hypothetically Ramp would collect ~250 bps (2.5%) per transaction, give 200 bps back to the bank, and keep 50 bps as revenue. Many companies further complicate the transaction with other fees and rewards on either side of the transaction. Ramp, however, takes a simple approach to interchange so that it can instead focus on product innovation to place it in a more central role within each customer’s financial stack. Eric Glyman puts it this way:

In January 2024, Ramp claimed to power $10 billion in accounts payable spend each year, a 10x increase in its preceding two years. In April 2024, CEO Eric Glyman stated that Ramp’s total purchase volume and revenue growth increased “faster quarter over quarter than it did over the same period in 2023, on a much larger base.”

As of May 2024, Ramp counts over 25K companies as customers, up from 15K in August 2023, and 5K in March 2022. From a company perspective, Ramp has grown from 495 employees in 2023, to ~730 as of April 2024. Ramp has not reported any layoffs in 2023 and 2024 as of May 2024, during a 1.5-year period that saw over 300K tech workers being laid off. Ramp has been efficient with its human capital, achieving over $300 million in annualized revenue with just ~500 employees.

Ramp reported reaching this $300 million figure at the end of 2023. This came after a March 2023 announcement that Ramp had seen 4x revenue growth in the previous year alone, after having crossed a $100 million revenue run rate in March 2022, making it among the fastest startups to achieve this particular milestone (although describing interchange revenue as ARR is not strictly accurate, as it is not contractual revenue).

Source: Not Boring

A January 2024 estimate by a third-party source projected that Ramp overtook older competitor Brex in total payment volume (TPV). By the end of 2023, Ramp reached an estimated $30 billion annualized TPV, growing 209% YoY. As of May 2024, Ramp is reportedly at $750 million in revenue.

In March 2022, Ramp raised a $200 million Series C at an $8.1 billion valuation. At that time it had 5K businesses as customers, and Ramp was powering over $5 billion in annualized payments volume for those businesses. In the year leading up to its Series C announcement, Ramp's customer base grew 7x year over year, cardholder growth was up 15x, and its largest customers were spending $10 million a month through Ramp. As CEO Eric Glyman put it:

While Ramp’s corporate card product has scaled quickly, Bill Pay has grown even faster. Eric Glyman described the rapid adoption of Ramp's Bill Pay product as follows:

The combination of growth in underlying customer spend and the launch of additional products that bring more customers onto the Ramp platform has enabled the company to achieve over 200% net dollar retention as of March 2022.

In April 2024, Ramp raised a $150 million Series D-2 round at a valuation of $7.7 billion. The round brought the company’s total funding amount to $1.2 billion in equity financing and $700 million in debt. The Series D extension was co-led by a new investor Khosla Ventures and existing backers Founders Fund with participation from existing investors Sequoia Capital, Greylock, and 8VC.

This extension round followed Ramp’s initial Series D raise of $300 million in August 2023 which occurred at a valuation of $5.8 billion. This was 28% lower than its valuation of $8.1 billion at the time of its Series C. Ramp was not the only fintech startup to see its valuation drop in the 18 months leading to its initial Series D raise; Stripe and Klarna, among others, saw steep declines as the market as a whole saw a drop in revenue multiples. In July 2023 Ramp was estimated to be worth $4.8 billion on the secondary markets. Its Series D extension valuation of $7.7 billion in April 2024 brought it closer to the $8.1 billion valuation at the time of its Series C.

In March 2022, Ramp announced a $200 million Series C at an $8.1 billion valuation. Over the preceding few years, Ramp’s valuation had grown rapidly; in August 2021, for instance, the company had been valued at $3.9 billion, less than half of its March 2022 valuation. The Series C round was led by Founders Fund (marking the third time the firm had led one of Ramp’s funding rounds). Other notable investors in Ramp include Contrary, D1, Coatue, Stripe, and Redpoint.

As of May 2024, Ramp is reportedly at $750 million in revenue, and was valued at $7.7 billion in its April 2024 Series D extension, implying a ~10.3x revenue multiple. Meanwhile, comparable public companies had a range of revenue multiples, from 0.8x for Expensify on the low end to 3.9x for BILL and 4.7x for AvidXchange on the high end.

Source: Koyfin as of May 2024

Automating the Buying Experience

The complex inflows and outflows within each company require significant human involvement and are typically under-optimized in terms of cost savings. The opportunity for Ramp to leverage its suite of products to automate customer spend more effectively is significant. The company has already mentioned that it has automated 90% of the expense management process for the 6% of its customers using all of its integrations. With things like bill pay logic and its acquisition of Buyer, Ramp has the ability to further automate the negotiation, purchase, and payment processes for its customers.

Leveraging AI to Expand the Product Stack

Ramp has made progress in the use of AI with products like Ramp Intelligence, and its customer service chat assistant. As of May 2024, Ramp has over 300K cardholders and has developed a detailed platform capable of analyzing spend management whether it be contracts, fraud detection, or financial forecasting. This was based on its diverse and large datasets. Ramp could leverage AI integrations further to move more ERP functionality to the platform. One example is continuing to expand its bill pay module so that it not only manages paying bills (accounts payable) but collects payments as well (accounts receivable). That existing limitation is one reason why some customers cite remaining with BILL.

As of May 2024, Ramp says that it monetizes primarily based on interchange revenue, and "may also make money from other features and services" such as international bill payments, negotiations, Flex, and Ramp Plus. Aspects of a company’s financial stack that Ramp still hasn’t touched include areas like payroll (labor is 50-60% of a typical company’s spend), and deeper accounting functionality (features that are still being served by integrations with tools like Netsuite.) With around $50 billion being spent annually on ERP software as of 2023, extending the platform to account for managing spend on employee salaries and analyzing data in this way can be an effective way of moving past competitors. As costs for using large language models and ingesting and understanding data decline amid high competition in the AI space, Ramp has an opportunity to extend its margins alongside refining its already present and new AI features to be even more effective.

As Ramp innovates by releasing more features and products, better cost savings, and insights for customers a natural flywheel is generated. More data means better cost savings and insights for the AI models, which leads to more companies’ onboarding and consistent growth.

Expansion via Acquisition

Ramp can continue to acquire companies to efficiently and effectively expand its product offerings. In August 2021, for example, Ramp acquired Buyer as a “negotiation-as-a-service” platform that claims to save clients money on large purchases like annual software contracts. In 2023, Ramp acquired Cohere.io, a startup predicated on AI-powered customer support, already releasing products under Ramp intelligence, Ramp’s Teams Integration, and internal use cases. Ramp also acquired Venue in 2023, to enter the procurement space to address more “complex” enterprises, and in January 2024 released Procurement and Vendor Management product offerings.

Product Differentiation

Selling technology to a finance organization is uniquely difficult both because the systems are critical and can’t fail, and because the space is surrounded by different regulatory and auditing requirements. Different tools are preferred by different stakeholders: finance leaders want as much control as possible, business line managers want as many rewards as possible, and employees want as simple an experience as possible.

Ramp’s emphasis has been on (1) alignment of its incentives with its customers by helping to minimize spend, (2) the quality of the product and user experience, and (3) broadening the number of functional areas to which its platform extends. While those things have resonated with customers and have driven exceptional growth, they may be less effective in the long run as they may prove difficult to articulate and communicate to prospective customers.

Packy McCormick describes it this way:

Being able to effectively maintain product-led growth while also building out a robust enterprise engine is never easy. While Ramp’s products have demonstrated clear differentiation, it's going up against established incumbents. As one example, as of May 2024, Ramp has ~1.9K reviews on G2 at 4.8 stars, compared to competitors with a larger number of total reviews, such as Navan (7.5K reviews, 4.7 stars), Expensify (5.1K reviews, 4.5 stars) and SAP Concur (6K reviews, 4.0 stars) With a 4.8-star rating, however, Ramp appears to be ahead of its competitors in terms of product experience.

Loss and Fraud Potential

Like any financial platform, Ramp is always at risk of fraud and has to maintain a robust know-your-customer (KYC) and anti-money laundering (AML) platform. Beyond typical threats to its corporate spending business, its Bill Pay, specifically, the Ramp Flex product offering introduces additional risk. Companies like Affirm, Klarna, and Afterpay extend “buy now, pay later” credit to consumers. Ramp is effectively doing the same for companies so it can delay paying their bills. Affirm’s exposure to consumer lending is more volatile depending on consumer spending. For example, from Q1 2022 to Q2 2022, Affirm saw a 38% increase in its charge-offs (basically estimated debt losses). Depending on the quality of the risks Ramp is taking, it could expose them to similar potential losses down the road.

Competitive Landscape

The competitive landscape for fintech is tough. As of May 2024, there are several startups like Brex, Airbase, Rho, and more that compete against Ramp, in addition to incumbents like AmEx. Each startup is making similar moves towards integrating AI and consolidating functions into a single platform. Investment in the space continues to grow, with $35 billion from VCs going into fintech in 2023. Ramp must seek to differentiate itself and drive specific wedges within broad areas of B2B payments it must do so with speed and quality, as competitors are expected to achieve similar functionality in products.

Ramp has focused on (1) aligning its success with its customers, (2) emphasizing high-quality products, and (3) broadening its platform to become a financial center of a customer’s universe. That differentiated approach has launched it into the top tier of software and fintech companies. Its product suite exposes it to billions of dollars of potential revenue in large and growing markets. The biggest question going forward will be its ability to continue to execute on broadening its product suite and maintaining product quality in a competitive landscape.

*Contrary is an investor in Ramp through one or more affiliates.