New York-based Ramp, a prominent player in the corporate card and expense automation sector, has secured a significant investment of $300 million, marking a notable shift in its post-money valuation. The new valuation stands at $5.8 billion, reflecting a 28% reduction from its prior valuation.
This funding comes in just over a year and three months following a noteworthy financial round that garnered $750 million in a blend of debt and equity financing, Ramp has attracted fresh capital. The earlier financing established a valuation of $8.1 billion, indicating a recalibration in the current round.
Diverse investor participation
Founders Fund spearheaded the funding round, with a diverse array of investors participating in the capital infusion. Key contributors included Redpoint Ventures, Thrive Capital, D1 Capital Partners, Spark Capital, Coatue Management, Iconiq, Altimeter, Stripe, Lux Capital, A* Partners, Definition Capital, Honeycomb, Kinetic, and other existing backers. To date, Ramp has amassed over $620 million in a combination of equity and debt financing.
“We founded Ramp with the intent to empower businesses. Ramp’s mission is to save our customers time and money so they can focus on their mission,” affirmed Eric Glyman, co-founder & CEO of Ramp. “Frankly, the current state of finance tools and legacy card programs is not acceptable. They trap finance teams into doing unproductive ‘busy work’. This funding will allow us to automate away even more of those tasks so that finance teams can focus on being more strategic.”
With a customer base exceeding 15,000, Ramp plans to allocate the newly raised capital toward product development and augmenting its workforce. The company’s recent expansion into procurement was further solidified through the acquisition of AI-powered customer support platform Cohere.io in June.
Strategic acquisition!
In a strategic move, Ramp has also announced its acquisition of Buyer, marking an expansion into negotiation-as-a-service solutions. Buyer, enables clients to secure an average savings of 27.3% on substantial purchases such as annual software contracts.
Through the incorporation, Ramp aims to offer a tailored and proactive method for achieving savings on significant transactions. This approach transcends the conventional perks and discounts typically associated with corporate cards.
“Over the course of the pandemic, software spending ballooned. It is now the second-largest line item for companies. By finding better value on these purchases, we’ve been able to have a meaningful impact on the bottom line for many businesses,” emphasised Kimia Hamidi, Founder and CEO of Buyer.
Founded in 2019 by Eric Glyman, Gene Lee, and Karim Atiyeh, Ramp has emerged as a leading provider in the corporate card sector. Facilitating billions of dollars in transactions annually, Ramp serves a diverse clientele, spanning from burgeoning startups to multibillion-dollar corporations, demonstrating its capacity to drive efficient spending management and foster sustainable business practices. Their clientele also includes rapid-growth startups like Ro, DoNotPay, Better, ClickUp, and Applied Intuition, as well as established entities across the United States such as Bristol Hospice, Walther Farms, Douglas Elliman, and Planned Parenthood.
“Ramp’s vision of helping businesses spend less is clearly resonating with customers, so we are delighted to be leading this round,” said Keith Rabois, Partner at Founders Fund. He also emphasised the substantial potential presented by the rapidly growing B2B payments landscape and the ongoing consolidation of financial software within enterprises.
With the latest round, Ramp joins the ranks of startups grappling with shifting dynamics in the private market. With many startups reevaluating valuations amidst changing investor sentiments, the focus on profitability and cash flow has become more pronounced.
