Ramp is yet another fintech newcomer that plans on disrupting corporate travel and expenses. Is its automated twist enough to help it stand out in a saturated market?
New York-based startup Ramp has raised $300 million in funding as it looks to bring a new way of managing expenses to the newly remote masses, joining a handful of other heavily-invested fintech newcomers targeting hybrid companies.
The corporate card and expense firm, which was founded in 2019, wants to exploit the transformation of small and medium-sized companies. Customers have apparently embraced Ramp to support teams that are working remotely but need to travel to the office on a regular basis, according to CEO and co-founder Eric Glyman.
But Ramp also has its eyes on how purchases like software are made. It’s hard to say how much business travel will be required in the future, despite emerging trends such as Airbnb properties being used as offices. But one area that will likely continue to grow as an expense — even outpacing travel — is buying software. And in the remote work era, more companies are giving employees greater autonomy to buy the tools they need to do their jobs effectively.
It’s not something traditional corporate cards, or travel and expense platforms, typically cater to. Ramp said card providers offered “complex rewards programs designed to encourage wasteful spending” and claimed payments “tended to be scattered across multiple systems, so businesses lacked a single view of how employees were spending.”
However, corporate travel agencies are now leaning towards non-travel spend. TripActions launched its Liquid card last year, to give more control to company employees, while American Express Global Business Travel launched Neo1 at the end of last month.
“Expense is no longer about travel related costs. With a hybrid workforce, who don’t have access to the ‘stationary cupboard,’ they now need to be allowed to purchase things for the home office,” said Gavin Smith, director of Element Travel Technology.
“Existing software solutions that are tied to a travel system are no longer fit for purpose. Small and medium-sized companies need a single solution that allows them to request to spend money, get the authorization, purchase from a preferred supplier and then submit the expense back,” he added, suggesting Ramp, and other platforms like Zoho Expense, could fill the gap.
Automated Travel Buying
As Ramp announced its $300 million funding on Tuesday, it also revealed it had bought a negotiation-as-a-service company called Buyer to automate procurement processes. This platform analyses all employee purchases and looks for instances where it can drive down costs if certain products are commonly used. Ramp claims this platform saves its clients an average of 27.3 percent on large purchases.
But Ramp may use this technology to allow customers to negotiate improved travel deals, according to reports, leveraging benchmarking spend data from millions of transactions on its platform.
Among Ramp’s new investors in the Series C funding round are Altimeter Capital — which has been tied to Singapore-headquartered superapp Grab — as well as Iconiq Capital, Vista Public Strategies, A* Partners, Definition Capital, Honeycomb, Flexport, Lachy Groom Fund, Olive Tree, and Kinetic.
Ramp claims it’s the fastest-growing startup to come out of New York, but the expense arena is becoming saturated, with similar expansions from startups like Denmark’s Pleo and Singapore’s Nium also making inroads, targeting travel with their combined credit card/expense software solutions.
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Photo credit: Ramp is reportedly being used to support teams who are working remotely but need to travel to the office on a regular basis. Paul Hanaoka / Unsplash