Ramp, a financial software business, said it has raised $300 million from investors at a $5.8 billion valuation.
(Bloomberg) — Ramp, a financial software business, said it has raised $300 million from investors at a $5.8 billion valuation.
The New York-based startup received capital in the funding round from Thrive Capital, Founders Fund, General Catalyst, Sands Capital and others. The valuation is lower than the $8.1 billion figure they raised funds at last year, reflecting the broader contraction in technology stock prices.
The company’s leaders were willing to accept market reality and raise on terms that are more reflective of today’s environment, said Keith Rabois, partner at Founders Fund and a member of Ramp’s board as well as an investor.
“This is a price set today by some of the best investors,” said Rabois, adding that the business still has sufficient cash on hand, but wanted to raise capital “opportunistically” to propel growth and possibly make more acquisitions. He said that he expects the company to eventually go for an initial public offering.
Kareem Zaki, partner at Thrive Capital and also an investor in Ramp, said it’s been tough for financial technology businesses and that he sees Ramp as “one of the few companies that can raise in this environment.” He credits the company with having a clear long-term vision. “They’ve had the right north star,” he said.
Ramp is looking to build an all-encompassing platform for finance teams, with offerings including software to monitor expenses and manage vendors. Ramp has more than 15,000 customers, such as Shopify Inc., Anduril and Discord, according to its website.
Ramp has surpassed $300 million in annualized revenue, a metric that multiplies the current month’s revenue 12 times, co-founder and Chief Executive Officer Eric Glyman said in an interview with Bloomberg News. The company is not presently profitable as it spends on growth, but “we do have a path to it,” he said.
Ramp’s pitch to customers is that their incentives are aligned. The firm, which offers a corporate card, says that it helps customers reduce spending, unlike some credit card businesses. Instead of increasing its revenue per customer, Ramp is more focused on increasing its number of customers, Glyman explained. “We exist to help our customers spend less and be more financially efficient,” he said.
The company recently expanded into procurement software with Ramp Plus. It also acquired Cohere.io, an AI-powered customer support business. Microsoft Corp. CEO Satya Nadella was announced as an investor and adviser.
There is still plenty of room for growth because the total addressable market Ramp’s chasing is large, due to the large number of companies with finance departments, Glyman said. We have “99% of the market left to go,” he added.
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