TechCrunch caught wind of corporate card startup Ramp back in August of 2019, when the company raised an early round of $7 million. Corp card rival Brex had put together a $100 million round just a few months before, and was en route to raising a huge debt round later in the year.
Ramp building a rival service to Brex wasn't a huge surprise. Startups often appear in waves, leading to groups of startups battling it out for similar customers. We've seen this in the file-storage space of yore, to insurtech marketplaces earlier this year.
Ramp launched in early 2020, added more capital, and is today announcing an expansion of the software side of its business by making its card-integrated expense management available to all of its customers.
The startup's early twist on corporate cards was simple cash back, and a software tool that helped root out duplicate and unnecessary expenses to help companies lower their total expenses. Given that spend-centered startups often generate revenue from customers using their cards, helping those same customers cut costs was an interesting angle on its market.
Now with the expansion of its expense management system to all its customers, Ramp is taking another step in a software-like direction. And as the company also claimed quick growth in a release it shared with TechCrunch, we got back on the phone with its co-founder and CEO Eric Glyman to dig a little.
Spend during a pandemic
2020's COVID-19 pandemic brought with itself a host of economic disruptions to both consumer and corporate spend. You can easily infer that some startups that provide cards and generate interchange revenue -- incomes stemming from users putting their provided cards down at gas stations, restaurants and cloud infra providers -- had a bumpy summer.
In contrast to that reasonable expectation, Ramp has seen regular growth, with Glyman telling TechCrunch that his company's "30-day purchase volume" result has been "growing (month over month) in the double digits each month fairly consistently." (In related news, online payments-as-a-service provider Finix has also seen quick volume growth in recent months.)
He credits Ramp's focus on cost control as a driver of its growth.
Which brings us back to the expense management product that Ramp is rolling out to its customer base as a whole today. It's been in beta for a minute. Per the CEO, some customers have been trialing the product since March, with Ramp "shipping updates weekly based on customer feedback" and slowly expanding access. (Brex also offers expense management tooling.)
Ramp provides both expense software and cards, while many companies have have disparate vendors for each of those services. This allows the loop between spend and expense management for Ramp customers to be pretty tight. The result of the vertical integration allows Ramp customers to save five working days each month, according to the company.
Expense management is a famously poor area of technology. You, reading this, probably have an expense that you need to file. And I bet you've eaten at least one bill in the last year because getting it through the corporate-provided system was just too much to handle (is this on purpose?). Hell, I forgot to file an expense earlier this year after travel stopped, and I wound up paying a late fee, and then late fees stemming from that first late fee that I didn't notice. (Ha ha ha ha, that was great! That was a great use of $150 of my own money!)
Anything that can be done to make the employee-corporate-card expense cycle faster and simpler is good news in my book, even if my employer isn't a Ramp customer; pushing for a better experience in one part of the market should force all participants to do better over time.
Closing on this bit of news, I wonder if cards aren't de facto commoditized by this point. Is there really that much ∆ between how different corporate credit providers underwrite, or vet spend risk on charge cards? And, aren't most consumer cards within a few degrees of one another? And then does the software that surrounds the physical or virtual card take on more precedence? Maybe. If so, Ramp is probably heading in the right direction.
More when a provider in the space is willing to share new, material growth figures.