Ramp, the corporate payments start-up co-founded by Peter Thiel and Thrive Capital, has nearly doubled its valuation to $13 billion following a recent share sale that raised $150 million from investors like GIC and Stripes. After experiencing a drop to $5.8 billion due to economic factors, Ramp’s valuation surge reflects a rebound in fintech driven by increased transaction spending. The company, which manages corporate expenses using AI, reported $700 million in annualized revenue, up from $300 million in August 2023. Ramp aims to evolve into a comprehensive platform offering various services, moving beyond payments to include procurement and travel.
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Ramp, the corporate payment startup supported by Peter Thiel and Thrive Capital, has nearly doubled its valuation to $13bn as financial technology firms recover from a challenging phase marked by reduced spending and economic instability.
The five-year-old firm reached this new valuation during a share sale where investors, including Singapore’s sovereign wealth fund GIC, the US private equity group Stripes, and venture capitalists like Josh Kushner’s Thrive, Khosla Ventures, and General Catalyst, purchased $150mn worth of shares from employees and early backers.
Basing its operations in New York, Ramp specializes in managing expenses, corporate cards, and accounting automation for businesses. The last reported valuation was $7.65bn in April of last year. The company is already supported by some of Silicon Valley’s leading investors, including Sequoia Capital and Thiel’s Founders Fund.
The jump in valuation to $13bn positions Ramp among the highest-valued US startups, with the exception of a few artificial intelligence companies like OpenAI.
This growth has been driven by a surge in spending on card transactions and bill payments. However, Eric Glyman, Ramp’s co-founder and CEO, stressed that the company has leveraged AI effectively throughout its operations.
“Using Ramp without AI isn’t really feasible,” he stated, noting that the technology progressed rapidly beyond simple chatbots to become “integrated into every aspect of the business: automated expense management, self-adjusting books, and capital seeking higher yields.”
“We’re part of a world where computers can converse, think, and reason, and finance fundamentally involves reasoning: ensuring that your capital increases in value each month,” he explained.
Ramp’s valuation reached $8.1bn in 2022, but it declined to $5.8bn the following year as increased interest rates affected consumer spending, impacting rival financial technology firms like Stripe and Klarna as well.
“The fintech sector has experienced turbulence due to the significant fluctuations in rates and spending patterns among businesses and consumers,” commented Kareem Zaki, a partner at Thrive Capital who spearheaded the firm’s investment in Ramp.
“Companies that gained market share prior to the downturn have continued to do so, even amid reduced customer spending. Now, as the market recovers, they are experiencing rapid advancements,” he added.
As per a source with insights into the firm’s finances, Ramp’s annualized revenue — a frequently used metric for high-growth startups that extrapolates the current month’s revenue over 12 months — is projected at $700mn, an increase from $300mn in August 2023.
The company is facilitating $55bn in payments on an annualized basis, a substantial rise from $10bn at the start of 2023. Ramp’s objective is to evolve into a platform that provides corporate clients with a variety of services rather than just a single product, Glyman stated.
The company aims to transition into a comprehensive platform for corporate clients, expanding its services beyond payments to include procurement and travel booking.
Zaki noted that this mirrors another Thrive portfolio company, Stripe, a leading fintech firm in Silicon Valley, which recently reported a valuation increase to $90bn during its own employee stock sale.
The largest US startups are increasingly seeking regular secondary stock sales to allow employees to redeem some equity as these businesses remain private longer.
Ramp’s stock sale was structured to enable early employees to access some of their equity in the company to “fund a child’s education or secure a down payment on a home,” stated Glyman. He added that the company does not have immediate plans for a public offering.