Eric Glyman and Karim Atiyeh, cofounders of corporate card startup Ramp
Financial technology startup Ramp is letting some employees and early investors cash out in a new deal that values the company at $13 billion.
The New York company announced the $150 million deal Monday. Khosla Ventures, Thrive Capital and General Catalyst were among the entities that bought shares in the round. The financing marks a step up from Ramp’s peak valuation of $8.1 billion in 2022. Ramp also raised a so-called down round that pegged the company’s price closer to $5.8 billion in 2023. The rebound in value shows some renewed investor appetite for high-growth startups, even in an era of higher interest rates.
The deal is also the latest in a string of private companies letting employees cash out shares and lowering the pressure on themselves to go public.
Stripe last week announced a tender offer that valued the company at $91.5 billion, helping its valuation rebound close to its peak of $95 billion. Co-founder and President John Collison told CNBC that Stripe has “no near-term IPO plans.” DataBricks and OpenAI have also announced major secondary rounds in the last six months.
Ramp is a financial software company that uses AI. The company issues credit cards and automates expenses and accounting. It competes with Brex, American Express and Concur in some arenas. CEO Eric Glyman said a bulk of Ramp’s customers are trying to cut overhead expenses in an era of corporate belt-tightening.
“Our core value proposition is helping businesses achieve more with less and spend less, which went from a-nice-to-have to truly the difference between whether you would exist or not in 2022 and 2023,” Glyman told CNBC.
The company serves 30,000 businesses in the U.S. including Anduril, Barry’s and Poshmark. Ramp plans to focus on enterprise expansion going forward, Glyman said.
Ramp is using artificial intelligence to automate a lot of its technology, Glyman said. The startup now powers over $55 billion in annualized purchase volume across card transactions and bill payments, up from $10 billion in January 2023, according to Glyman. Ramp makes money off of interchange fees on credit cards plus higher-margin software subscriptions.
As for an initial public offering, Glyman said there isn’t a “timeline in place.” But it is “something we’re thinking a lot about.” He said the company was burning less than $2 million per month on average last year, reducing its need to raise new capital.
“There isn’t what you would typically see with a strong need for the capital infusion an IPO would provide,” Glyman said. “That said, companies that are seeking to stand the test of time often pursue going public.”
