Fintech startup Ramp has secured $300 million in a funding round co-led by existing investor Thrive Capital and new investor Sands Capital, bringing its post-money valuation to $5.8 billion.
Last week, The Information reported that Ramp, a spend management company, was in the process of raising “several hundred million dollars” at a $5.5 billion valuation.
In March 2022, Ramp raised $200 million in equity funding at a valuation of $8.1 billion. Since its founding in 2019, Ramp has accumulated a total of $970 million in equity financing and $700 million in committed debt funding.
Other participants in the latest funding round include General Catalyst, Founders Fund, and other existing investors. Ken Chenault, chairman and managing director of General Catalyst and former chairman and CEO of American Express, was reportedly involved in the investment decision.
Ramp plans to use the new capital to accelerate product development, expand into related categories, and significantly increase hiring in the latter half of this year.
Ramp is not alone in experiencing a drop in valuation over the past 18 months. Many large private fintech companies, including Stripe and Klarna, have seen significant declines.
Notice.co, a company that develops pricing tools for private markets, estimated in July that Ramp’s valuation based on secondary share trading was around $4.8 billion.
In March, co-founder and CEO Eric Glyman told that the company’s revenue had grown fourfold in the previous year, driven primarily by its rapidly expanding bill pay segment, though the company had not yet reached profitability.
Ramp had surpassed $100 million in annualized revenue before its third anniversary in March 2022 and has now exceeded $300 million in annualized revenue.
Glyman also mentioned that at that time, the startup still had “the vast majority of [equity] funds” it had “ever received” on its balance sheet.
Raising $300 million in today’s challenging environment is a notable achievement. Global fintech funding dropped nearly 50% to $7.8 billion in the second quarter, marking its lowest level since 2017, according to CB Insights.
Additionally, funding from $100 million+ mega-rounds totaled just $2 billion during the quarter, a six-year low. Ramp has been vocal about its ambitions to grow in terms of both products and customers.
Earlier this month, Ramp announced its entry into the procurement space, focusing on more “complex” enterprises, and revealed that it had secured Canadian e-commerce giant Shopify as a new customer.
Over time, Ramp has continued to expand its offerings. Initially launched as a corporate card startup, the company has gradually added features such as bill pay, vendor management, and travel expense management.
While Ramp originally targeted small-to-medium-sized businesses (SMBs), it now serves “businesses of all sizes,” including startups, multibillion-dollar enterprises, and even potato farmers.
By early August, more than 15,000 businesses were using Ramp, compared to 5,000 in March 2022, according to the company.
