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Ramp, a startup offering a corporate card focused on cost savings, today said it acquired Buyer, a “negotiation-as-a-service platform” that aims to help enterprise customers save on purchases like annual software contracts. CEO Eric Glyman said that with the addition of the Buyer team, Ramp will be able to offer a more customized approach to savings, going beyond the perks typical of corporate cards programs.
The company also announced today that it closed a $300 million series C funding tranche led by Founders Fund, with participation from Redpoint Ventures, Thrive Capital, D1 Capital Partners, Spark Capital, Coatue Management, Iconiq, Altimeter, Stripe, Lux Capital, A* Partners, and Definition Capital. Glyman said that the round, which values the company at $3.9 billion post-money, will be put toward product development, growing Ramp’s product and engineering teams, and investing in sales and marketing efforts.
Corporate spending growth
The pandemic substantially decreased the volume of physical corporate card transactions, according to market intelligence firm Beroe, due largely to dips in business travel. However, the market is expected to recover post-pandemic, growing at a compound annual growth rate of 7.3% between 2020 and 2026.
New York-based Ramp, which was founded in 2019 by Glyman, Gene Lee, and Karim Atiyeh, provides virtual and physical cards that offer 1.5% cashback on purchases. Its management tools allows companies to control spend with multi-level rules, vendor spending limits, merchant blacklists, and approvals, as well as spending insights that combine expense reporting, accounting, and more.
Ramp collects and verifies over 90% of receipts and offers next-day payouts for out-of-pocket expenses like mileage and incidentals. The platform also surfaces duplicate subscriptions in dashboards that can filter charges by time, category, department, and employee.
Glyman said that Ramp’s bill pay feature, which was recently introduced, employs AI to simplify the process of paying suppliers. Customers can upload and pay bills with AI-powered invoice recognition, emailing or dragging-and-dropping invoices in Ramp.
“Ramp [can] auto-populate vendor information, line items, and payment details, allowing customers to upload, review, and pay bills in seconds, automating away what was a very manual and tedious workflow before,” Glyman told VentureBeat via email. “We benefit from a very broad set of invoice data, standardization across documents, and feedback from users to improve the [machine learning] models.”
With the purchase of Buyer, Ramp said it’s increasing its focus on helping customers spend less by combining negotiation experts with benchmarking data from millions of transactions. The brainchild of Ghostit founder Kimia Hamidi, Buyer uses a pricing database and staffers to negotiate on companies’ behalves for savings on tech stacks, cloud computing, software-as-a-service plans, IT infrastructure, office space, insurance coverage, and furnishing.
As Hamidi explained, Buyer takes a deep dive into a company’s current spending and aligns on new procurement goals. Once introduced as the company’s procurement team via email, it kicks off the negotiating process. A monthly report shows up-to-date spending and where the company could potentially be saving more money.
“Over the course of the pandemic, software spending ballooned. It is now the second largest line item for companies. By finding better value on these purchases, we’ve been able to have a meaningful impact on the bottom line for many businesses,” Hamidi said in a statement. “We couldn’t be more excited about joining the Ramp team, because both of our companies care deeply about helping our customers achieve more through savings. Joining Ramp will allow us to scale this vision.”
Savings focus aside, Andrew Bartels, VP and principal analyst at Forrester, believes that there’s little to differentiate Ramp from the incumbent competition. The company is one of several “trying to solve a problem that doesn’t really need a new solution,” he told VentureBeat in an interview via email.
“There are lots of corporate cards and purchasing cards already available. There are lots of existing applications for managing the most common spending of small and midsize businesses, which are travel and expense applications,” Bartels said. “And there are several existing solutions for linking corporate or purchasing cards to these spend management applications. I don’t see anything that Ramp is doing as especially unique or innovative.”
But Glyman said that Ramp’s customers have embraced its products to support teams who are working remotely but need to travel to the office on a regular basis. Traditional travel and expense programs designed to support employees traveling internationally offer less flexibility, making Ramp’s platform increasingly attractive, Glyman asserted.
“For companies that have gone remote, travel is now a need of every employee. How do you go from monitoring [travel and expense] spend for a few dozen people to an entire company? Our customers are easily able to issue cards to every employee, use card level controls to to enforce their [travel and expense] policies, flexibly scale up and down limits, and automate receipt and memo collection,” Glyman said.
Ramp’s revenue grew by over 6,000% in 2020 and quadrupled compared with the start of 2021. Transaction volume, which is in the mid-eight figures, more than tripled since the 150-employee company’s last funding round in April.
More than 30,000 cardholders across over 2,000 businesses, including Ro, DoNotPay, Douglas Elliman, and Planned Parenthood, are now using the Ramp platform, Glyman said.
“Ramp will build an ecosystem of empowered buyers and on-demand services to negotiate the best rate on anything that can be purchased with a card — from travel to software. Our goal is to shift purchasing power back into the hands of our customers,” he added.
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