Ramp Raises $300M at $3.9B Valuation & Announces Acquisition

Ramp Secures $300 Million in Series C Funding, Reaching $3.9 Billion Valuation

Just under five months following a $115 million funding round, Ramp, a spend management platform, has revealed a new $300 million Series C investment. This latest financing establishes the company’s valuation at $3.9 billion.

Significant Valuation Increase

This valuation represents more than a doubling of the $1.6 billion valuation Ramp held in April during its Series B funding.

Founders Fund spearheaded the current round, bringing the total equity and debt raised by the fintech company to over $625 million since its launch in March 2019.

Investor Participation

The financing round saw participation from existing investors including Redpoint Ventures, Thrive Capital, D1 Capital Partners, Spark Capital, Coatue Management, Iconiq, Altimeter, Stripe, Lux Capital, A* Partners, and Definition Capital. Founders Fund also previously led Ramp’s $15 million Series A round in February 2020.

Rapid Growth in 2021

Ramp has experienced substantial growth since the beginning of 2021. The number of cardholders on the platform has increased fivefold.

Currently, over 2,000 businesses utilize Ramp as their primary spend management solution. Transaction volume on the company’s corporate cards has tripled since April’s funding announcement.

According to CEO and co-founder Eric Glyman, Ramp has seen a year-over-year increase of 1,000% in transaction volume. Revenue has mirrored this growth, also increasing by 1,000% during the same period.

Diverse Customer Base

Ramp’s customer base is diverse, ranging from startups and unicorns like Ro, DoNotPay, Better, ClickUp, and Applied Intuition, to established businesses such as Bristol Hospice, Walther Farms, Douglas Elliman, and Planned Parenthood.

Accelerated Growth and Investment

Glyman explained to TechCrunch that the company’s rapid growth is a key factor driving the new investment and valuation. He noted that August is on track to be the month with the highest percentage growth all year.

This level of growth is typically observed in earlier stages of a company’s lifecycle and often diminishes as the company matures.

Founders Fund’s Perspective

Keith Rabois of Founders Fund stated, “As the company has grown, I’ve continued to invest heavily because it’s rare to find a business with a growth rate that is actually increasing as it gets larger. Typically growth slows as a company scales, but demand for Ramp’s product is only accelerating as the team builds awareness and strengthens their product offering.”

Acquisition of Buyer

Ramp also announced the acquisition of Buyer, a “negotiation-as-a-service” platform that helps clients save an average of 27.3% on significant purchases, like annual software contracts.

Integrating the 10-person Buyer team will enable Ramp to provide customers with a “customized and proactive approach” to savings on large purchases.

Expanding Savings Capabilities

Glyman highlighted the increasing number of B2B growth SaaS companies and their pricing strategies. He stated that Buyer is a leader in helping customers negotiate lower rates, particularly for businesses lacking dedicated procurement departments.

Buyer has saved its customers approximately 27% on SaaS contracts, and Ramp intends to incorporate these savings into its offerings.

The acquisition followed a prior partnership, with Ramp deciding that full integration would be more beneficial for future development.

Future Product Expansion

Ramp plans to expand its product offerings through the acquisition. By combining Buyer’s team with spend data from millions of transactions, Ramp aims to help customers negotiate the best rates on a wide range of purchases, from travel to software, ultimately shifting purchasing power back to buyers.

Additional Savings Features

Ramp offers additional savings features, including 1.5% cash back on all purchases. It also identifies opportunities to reduce spending, such as canceling duplicate subscriptions and eliminating redundant licenses.

The platform also alerts companies to better pricing options, like switching to annual rates for potential savings of 20%. It helps customers replace expensive solutions like Concur, Expensify, or Bill.com with its expense management capabilities.

Ramp claims its customers save an average of 3.3% annually by using its corporate card.

Merchant Blocking Feature

The company’s merchant blocking feature, added earlier this year, has become one of its most popular features since its introduction.

Future Plans

The new capital will be used to accelerate the development of Ramp’s finance automation platform. The company will also continue to expand its team, which has grown from 65 people at the start of the year to nearly 150.

“Hiring is going to be the biggest use of our capital,” Glyman stated.

Ramp will also invest heavily in product development, including expanding into broader B2B payments, and increasing marketing and brand awareness. The company will also actively seek additional acquisition targets.

Long-Term Vision

While currently generating revenue primarily through interchange fees, Glyman emphasized that Ramp views itself as a SaaS operator. He stated, “Our long-term strategy is to develop great software.”

Competitive Landscape

The spend management sector is becoming increasingly competitive. Last week, Brex announced the acquisition of Weav for $50 million, marking its first significant acquisition. Founded in 2017, San Francisco-based Brex was valued at $7.4 billion earlier this year after raising a $425 million Series D led by Tiger Global. Brex focuses more on early-stage startups, while Ramp generally serves larger, more established companies.