New York-based startup Ramp has raised $300 million in funding as it looks to bring a new way of managing expenses to the newly remote masses, joining a handful of other heavily-invested fintech newcomers targeting hybrid companies.
In 2019, the corporate expense and card company was established to help small and medium-sized businesses transform. Customers have apparently embraced Ramp to support teams that are working remotely but need to travel to the office on a regular basis, according to CEO and co-founder Eric Glyman.
Ramp is also interested in how software purchases are made. It’s hard to say how much business travel will be required in the future, despite emerging trends such as Airbnb properties being used as offices. Software will continue to be a growing expense, even surpassing travel. In the era of remote work, companies give employees more control over the purchase of the software they require to perform their job effectively.
This is not something that traditional corporate cards or expense and travel platforms typically target. Ramp stated that card companies offered complex rewards programs to encourage wasteful spending. He also claimed that payments were often scattered across many systems so that businesses didn’t have a clear view of employees spending.
Corporate travel agencies now favor non-travel spending. To give employees more control, TripActions introduced its Liquid Card last year. American Express Global Business Travel also launched Neo1 last month.
The expense is not just about the travel-related costs. With a hybrid workforce, who don’t have access to the ‘stationary cupboard,’ they now need to be allowed to purchase things for the home office,” said Gavin Smith, director of Element Travel Technology.
Existing software systems that tie to travel systems are not suitable for their purpose. Small and medium-sized companies need a single solution that allows them to request to spend money, get the authorization, purchase from a preferred supplier and then submit the expense back,” he added, suggesting Ramp, and other platforms like Zoho Expense, could fill the gap.
Automatic Travel Purchase
As Ramp announced its $300 million funding on Tuesday, it also revealed it had bought a negotiation-as-a-service company called Buyer to automate procurement processes. The platform analyzes all employees’ purchases to identify instances in which it could lower costs by recommending products that are frequently used. Ramp estimates that this platform can save its customers an average 27.3 percent when it comes to large-scale purchases
But Ramp may use this technology to allow customers to negotiate improved travel deals, according to reports, leveraging benchmarking spend data from millions of transactions on its platform.
Among Ramp’s new investors in the Series C funding round are Altimeter Capital — which has been tied to Singapore-headquartered superapp Grab — as well as Iconiq Capital, Vista Public Strategies, A* Partners, Definition Capital, Honeycomb, Flexport, Lachy Groom Fund, Olive Tree, and Kinetic.
Ramp says it is the fastest growing startup out of New York. However, the expense market is saturated with startups such as Pleo in Denmark and Nium in Singapore. These companies are also expanding their reach into the travel industry with their combination credit card/expense management software.
Publiated at Wed 25 August 2021, 17:42.53 (+0000).