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Ramp’s Valuation Soars to $13 Billion in New Funding Round
Corporate card startup Ramp, co-founded by Eric Glyman and Karim Atiyeh, has announced a significant new funding arrangement, allowing some employees and early investors to cash out. This deal values the company at an impressive $13 billion.
On Monday, the New York-based financial technology firm revealed a $150 million investment led by notable venture capital firms such as Khosla Ventures, Thrive Capital, and General Catalyst. This latest appraisal marks a remarkable increase from Ramp’s previous valuation peak of $8.1 billion in 2022. Earlier this year, the company faced a down round that dropped its value closer to $5.8 billion. This resurgence indicates a growing investor interest in high-growth startups, despite the prevailing environment of elevated interest rates.
This initiative aligns with a broader trend among private companies allowing employees to cash out shares, alleviating some pressure to pursue public offerings. For instance, Stripe recently announced a tender offer that valued the company at $91.5 billion, edging its valuation back toward its former high of $95 billion. Co-founder John Collison remarked that Stripe currently has “no near-term IPO plans.” Additionally, companies like DataBricks and OpenAI have also engaged in substantial secondary funding rounds recently.
Ramp stands out as a financial software provider leveraging artificial intelligence to enhance its offerings. The company specializes in issuing corporate credit cards and automating expense management and accounting processes. In doing so, it competes directly with established players like Brex, American Express, and Concur. CEO Eric Glyman emphasized that many of Ramp’s clients are focused on reducing operational costs in light of the ongoing trend of corporate fiscal restraint.
“Our core value proposition is assisting businesses in achieving more with fewer resources and reducing expenses,” Glyman stated in an interview. He noted that this approach shifted from being merely beneficial to essential for survival during the challenging years of 2022 and 2023.
Currently, Ramp serves around 30,000 businesses in the United States, including well-known organizations such as Anduril, Barry’s, and Poshmark. Looking ahead, Glyman indicated that the company plans to intensify its efforts on expanding into enterprise markets.
Artificial intelligence is at the forefront of Ramp’s innovation strategy, powering a diverse range of its technological solutions. Glyman reported that the startup managed over $55 billion in annualized purchase volume from card transactions and bill payments, a significant increase from $10 billion recorded in January 2023. Ramp generates revenue through interchange fees on credit card transactions and higher-margin software subscriptions.
Regarding the potential for an initial public offering, Glyman remarked that while there is no definitive timeline, it remains an important topic of discussion within the company. He noted that Ramp was operating at a reduced burn rate of less than $2 million per month on average over the past year, which diminishes its urgent need for the capital typically associated with IPOs.
“There isn’t the usual strong demand for capital injection that typically drives IPOs,” Glyman explained. “Nonetheless, companies aiming for longevity often pursue public offerings as a strategic goal.”
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