Fintech Startup Ramp Receives $300 Million Investment

Fintech startup Ramp has received $300 million in investment, co-led by existing backer Thrive Capital and new investor Sands Capital. The company has raised a total of $970 million in equity financing and $700 million in committed debt financing since its inception in 2019. Other investors participating in the latest financing include General Catalyst, Founders Fund and other existing backers. Ken Chenault, chairman and chief executive officer of General Catalyst and former chairman and CEO of American Express, was also said to be involved in the investment decision.

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Fintech Startup Ramp

How will the company use its new capital? It will use it to accelerate product development, expand into adjacent categories and "significantly hire" in the second half of this year. Ramp is not the only fintech startup to experience a valuation decline in the last 18 months. Several of the large private companies in the region, including Stripe and Klarna, have seen sharp declines in valuation. If secondary activity is taken as an indicator, Ramp's current valuation is not far off the estimates made by Notice.co, a company that develops a pricing tool for private markets.

In March, co-founder and CEO Eric Glyman noted that the company has seen its revenue grow 4x in the last year (led by the fastest-growing bill payment segment) but has yet to turn a profit. The company's annual revenue had exceeded $100 million before its third birthday in March 2022, and it now states that annual revenue has also exceeded $300 million.

It is not an easy task to raise $300 million in today's current environment. Global funding in the fintech space almost halved in the second quarter to $7.8 billion. This is the lowest level since 2017. In addition, funding from mega rounds of more than $100 million totalled just $2 billion in the quarter. This is also the lowest level in six years. Ramp expresses its desire for growth, both in terms of products and customers. Earlier this month, Ramp also announced that it was entering the acquisition space, as it focussed more on "complex" businesses, and brought a new customer to Canadian e-commerce giant Shopify.

It's worth noting that over time, Ramp has continued to add to its offerings, starting as a business card startup and adding features such as invoice payment, merchant management and travel expense management. Initially focussing on small and medium-sized businesses (SMBs), the startup now works with "businesses of all sizes", from startups to multi-billion dollar enterprises and potato farmers. As of early August, more than 15,000 businesses were using Ramp, the company said.