Ramp, a startup that competes in the corporate spend market, announced that it has secured a $150 million debt facility with Goldman Sachs.
Ramp co-founder and CEO Eric Glyman disclosed its new credit access. Glyman said that until it was secured, his company had previously financed customer corporate spend off its own balance sheet. That effort would have become more difficult and inefficient as Ramp secured more customers, something that its rapid-fire fundraising implies that it has.
Its larger startup category is growing. Ramp, Brex, Airbase, Divvy, Teampay and others compete for the custom of companies’ spend; the startups provide credit to businesses usually on a charge-card basis, collecting interchange revenues and, in some cases, software incomes as well.
The tingling feeling you have on the back of your neck is correct; Ramp is now big enough to share harder numbers than mere percentage growth metrics. We do know that the company reached the $100 million spend threshold an aggregate metric, not a rate in the fall of 2020 after being founded around 18 months earlier. From there you can math your way to an estimate of the company’s current spend base.
Ramp is betting its software package, wrapped around corporate cards, on a focus on savings; the startup helps customers root out repeat payments and other mal expense.
It has competition. Ramp’s rivals are also layering software on top of corporate card offerings. A question that TechCrunch has raised is whether all players in the maturing corporate spend space will wind up charging for their software layer on top of their credit offerings
Corporate spend TAM would rise if so.
To grow what’s going on in the corporate spend management space, recall the changes in the world of venture capital over the last decade or so. In olden times, venture firms had money to invest in startups. There wasn’t much by current standards, and it was concentrated in only a few hands. It was rare. So, venture capitalists were able to make you come to them, charge more equity per dollar of investment and not offer modern-level services. Today, however, in venture-land money is plentiful, so investing terms are more generous. And, on top of merely offering access to capital, your local VC probably wants to help startups hire, and more.
Corporate spend is the same. Offering credit and corporate cards is now barely table stakes; the value of the software on top of the revolving charge card is the competition.
Let’s see how fast Ramp can grow its customer base, spend and revenue, while scaling its software. And how soon one of its rivals tries to one-up its latest with news of its own. This is a fun space to watch.