Just one year after launching, corporate credit card startup Ramp has become fintech’s latest unicorn, amassing an eye-popping $1.6 billion valuation as it received $115 million in new funding led by D1 Capital Partners and $95 billion payments goliath Stripe.
Announced on Thursday, Ramp’s all-equity round brings the New York City-based company’s total funding to $320 million, including $150 million in debt financing from Goldman Sachs in February. Goldman doubled-down with an equity investment in this latest round, alongside Founders Fund, Coatue Management and Thrive Capital.
“It turned out to be just an incredible year for Ramp,” says Cofounder and CEO Eric Glyman, a 30-year-old Harvard College grad who bills Ramp as the first corporate card designed to help customers spend less. Like fintech competitors Brex and Divvy, Ramp offers zero fees, no interest rates and cash-back rewards with its credit card, but it also sports an expense-management platform whose algorithms analyze transactions to identify savings opportunities—a feature Glyman says helped the average client cut wasteful spending by about $100,000 over the past year.
“When March, April and May came around, this suddenly started to mean the difference between making it through the next month and helping keep more and more folks on payroll,” says Glyman of the company’s early days during the pandemic. The company launched its services on February 12, 2020—just one month before dozens of states started mandating lockdowns that dealt a crippling blow to the revenues of small businesses—Ramp’s main market.
Headquartered less than two blocks south of Manhattan’s Union Square, Ramp has already picked up around 1,000 clients, including buzzy social app Clubhouse, mortgage fintech Better and nonprofit Planned Parenthood. With transaction volume skyrocketing 400% in the past six months alone, Ramp’s corporate credit card has processed nearly $1 billion in transactions since launching 14 months ago—beating out the roughly two years it took competitor Brex to reach that milestone.
The new funding comes at a time of massive growth in value for fintechs. Utah-based Divvy, which sports a $1.8 billion valuation, landed $165 million in new funding this January, and Brex is reportedly raising new capital that could almost triple the company’s valuation to $8 billion—just four years after launching. According to PitchBook, fintech companies have raised a staggering $21 billion in venture capital so far this year, putting the industry on track to best the $53 billion in record funding raised in 2018.
As for Ramp, it’s planning to use its fresh capital for product development and to support its swelling employee headcount, which is up five-fold during the pandemic to about 100. Glyman says Ramp wants to double-down on its expense management software with automated savings and accounting features, noting that more than 90% of the firm’s customers have made the full switch to its spending management platform from legacy providers like Expensify and Concur. To manage growth, the firm has tapped former Stripe and Goldman Sachs executive Colin Kennedy as chief business officer.
A Las Vegas native, Glyman’s not unfamiliar with the high-growth startup world. He met his fellow cofounders, Chief Technology Officer Karim Atiyeh and Chief Product Officer Gene Lee, in college and high school, respectively. In 2014, Glyman and Atiyeh started Paribus, which helped online shoppers get automatic price refunds on past purchases. Within a year of its launch in May 2015, the service had almost one million users, Glyman says. That caught the attention of credit-card giant Capital One, which acquired Paribus for an undisclosed sum in October 2016.
Now Glyman’s eager to take on the “800-pound gorilla” in the corporate credit card space—American Express, which posted nearly $871 billion in transaction volume last year. Glyman notes that about one-third of Ramp’s customers have switched over from AmEx.
“In a lot of ways, it feels like Ramp is this well-kept secret that most people have never heard of,” says Glyman after the company’s year of explosive growth. “We think there’s a lot of opportunity to grow.”