Throughout the years, Ramp has established itself as a notable player in the realm of corporate cards and expense management. The company has expanded into areas like travel and bill payments, securing over $1.2 billion in venture capital along the way.
Now, this six-year-old fintech company is unveiling a new direction in its growth strategy — a foray into the digital banking sector with a product known as Ramp Treasury.
Essentially, Ramp seeks to empower its users to generate income in addition to merely saving it, as stated by CEO and co-founder Eric Glyman in an exclusive discussion with TechCrunch.
“We analyzed the checking accounts and deposits associated with Ramp and discovered that most were earning an interest rate of 0.00%,” Glyman noted. He explained that Ramp Treasury is intended to complement a client’s existing banking arrangements rather than replace them.
With Ramp’s latest Treasury offering, businesses have the opportunity to manage their funds in a business account and receive a yield of 2.5%, or even potentially higher returns through a money market fund. Therefore, they can access their cash more promptly for paying bills, given that the funds in the business account are liquid.
Similar to other fintech players in this sector, Ramp is not a bank itself but collaborates with established banks for this service, as Glyman pointed out. The startup is working with First Internet Bank of Indiana for the cash deposit account and with Apex on the investment aspects.
Ramp operates within a competitive landscape that features rivals like Mercury, Brex, Navan, Rho, and Mesh Payments. Notably, Brex, which is among the most recognized, had previously pursued a bank charter but later chose not to proceed.
For its part, Ramp does not intend to transform into a digital bank, but the launch of its treasury account marks a significant milestone that is expected to enhance the company’s profitability, Glyman said. It also positions Ramp as a more comprehensive solution for its clients, enabling them to consolidate their finances rather than juggling multiple accounts across various institutions.
Currently, the company is not disclosing its revenue details. In March 2023, Glyman informed TechCrunch that Ramp experienced a fourfold increase in revenue in 2022, primarily driven by its rapidly expanding bill pay service, although it wasn’t yet profitable. By March 2022, the company had surpassed $100 million in annualized revenue, and in the summer of 2023, it reported exceeding $300 million in annualized revenue.
As of today, Glyman revealed that Ramp has grown its customer base to over 30,000, a significant increase from roughly 15,000 a year ago, and facilitated over $50 billion in transactions through card swipes and bill payments. Approximately 18 months prior, that figure was nearly $10 billion, according to Ramp.
The company primarily generates revenue from interchange fees associated with Ramp card usage, transaction fees on bill payments, and SaaS revenue from customers who opt for its Plus offering. It also benefits from foreign exchange conversions during international transactions and receives affiliate fees from travel bookings made via its platform, among other income streams.
With the rollout of its Treasury product, Ramp will further accrue earnings from the spread its banking partners offer based on the total balances within a customer’s business account.
“We return a considerable portion of this to the customer in the form of the interest rate we offer, but we retain enough to ensure we remain profitable,” Glyman remarked.
Ramp is distinct among larger fintech firms in that it has not conducted layoffs in recent years, though, like many, its valuation has decreased from previous peaks. Last April, the company secured $150 million in a funding round headed by Khosla Ventures and Founders Fund, reaching a post-money valuation of $7.65 billion. This funding nudges it closer to the $8.1 billion valuation it achieved in March 2022.
By the end of 2024, the company is set to surpass 1,000 employees, according to Glyman, an uptick from 730 at the time of its funding round last April.
Looking forward, Glyman indicated that Ramp is considering an IPO as a long-term objective.
“Our main focus is to establish a robust business, irrespective of whether it remains private or goes public,” he stated.
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