Over the years, Ramp has established a prominent position in the corporate card and expense management sector. It has expanded into travel, bill payments, and more, while successfully raising over $1.2 billion in venture capital.
Today, this six-year-old fintech startup is introducing a new offering, Ramp Treasury, which marks its foray into digital banking.
In essence, Ramp seeks to provide its clients with opportunities to earn money rather than merely save, according to insights shared by CEO and co-founder Eric Glyman in an exclusive conversation with techcrunch.
Glyman highlighted the observation that many clients linking their checking accounts and deposits to Ramp were earning 0.00% interest. He mentioned that Ramp Treasury aims to complement existing bank accounts rather than replace them.
With the introduction of its Treasury product, businesses can store funds in a business account with an interest rate of 2.5% or opt for a money market fund for potentially enhanced returns. Glyman noted that the liquidity of cash stored in the business account allows for swift access to funds for bill payments.
Emphasizing their structure, Glyman clarified that Ramp is not a bank; it collaborates with banking institutions to offer these services. Ramp has partnered with First Internet Bank of Indiana for cash deposit accounts and with Apex for investment-related services.
Ramp operates in a highly competitive landscape featuring numerous rivals, including Mercury, Brex, Navan, Rho, and Mesh Payments. Notably, Brex, which is widely recognised, had once pursued a bank charter before deciding not to follow through on that path.
Although Ramp does not aim to become a digital bank, the launch of its treasury account represents a significant advancement for the company. Glyman indicated that this move is expected to enhance Ramp’s overall profitability while providing a comprehensive solution for clients, enabling them to consolidate funds rather than managing multiple accounts.
Currently, the company has not disclosed its revenue details. In March 2023, Glyman disclosed that Ramp’s revenue had quadrupled in 2022, primarily driven by its rapidly expanding bill payment segment, though the company was not yet profitable. By March 2022, Ramp had exceeded $100 million in annualised revenue, and by summer 2023, it announced an escalation to over $300 million annualised revenue.
Recently, Glyman reported that Ramp has surpassed 30,000 customers, a significant increase from around 15,000 the previous year. The platform facilitated over $50 billion in transactions related to card usage and bill payments; this figure was approximately $10 billion about 18 months ago, according to Ramp.
The company predominantly generates revenue through interchange fees charged whenever a Ramp card is used, along with transaction fees associated with bill payments. Additionally, Ramp receives SaaS revenue from customers opting for its Plus offering, foreign exchange income from international transactions, and affiliate fees for bookings via its travel service, among other revenue streams.
With the launch of its Treasury product, Ramp will also gain a spread from its banking partners based on total balances across all customer funds held within their business accounts.
Glyman stated that a significant portion of this amount is returned to customers in the form of the promoted earn rate, although they retain some revenue to ensure business profitability.
Ramp stands out as one of the few major fintech firms that has not conducted layoffs in recent times, even as its valuation was affected after reaching prior peaks. In April, the company successfully raised $150 million in a funding round led by Khosla Ventures and Founders Fund, achieving a post-money valuation of $7.65 billion. This funding round brought its valuation closer to the $8.1 billion it accomplished in March 2022.
By the end of 2024, Glyman noted that the startup had exceeded 1,000 employees, an increase from the 730 employees reported during the funding round last April.
Looking to the future, Glyman mentioned that Ramp has long-term aspirations for an IPO.
Glyman reiterated their focus on establishing a strong business, whether it remains private or transitions to public.