Online payments giant Stripe backs Ramp as it raises $300m

Stripe previously co-led a $115m funding round for its rival just four months ago

Ramp co-founders Eric Glyman and Karim Atiye

Ramp co-founders Eric Glyman and Karim Atiye

 

Stripe has returned to back US fintech Ramp in a new $300 million (€255.7 million) investment just months after co-leading a $115 million funding round for the fast-growing start-up.

The investment comes despite Ramp operating in an area in which Stripe also has an interest, that of corporate cards.

Headquartered in New York, Ramp was established in 2018 by Eric Glyman and Karim Atiye who previously founded Paribus, a consumer finance start-up acquired by Capital One in 2016.

The company has developed a corporate card that is built to save businesses money by analysing usage to help companies identify savings. It has experienced stellar growth of late with the number of cardholders on its platform increasing fivefold since January alone.

Over 2,000 US businesses are now using Ramp as their primary spend management solution leading to a tripling of transaction volume on Ramp corporate cards since the company’s $115 million Series B announced in April 2021, which valued the company at $1.6 billion.

The new $300 million Series C round values the company at $3.9 billion and brings to over $625 million, the amount raised by Ramp to date. This makes it one of the fastest growing start-ups in the US.

The funding round coincides with Ramp making its first acquisition. It has bought Buyer, a “negotiation-as-a-service” platform that enables companies to make bigger savings on big ticket purchases such as annual software contracts

Founders Fund, a San Francisco-based venture capital fund, which has more than $6 billion in capital under management, led the Series C round in Ramp. Its founders include Paypal co-founder Peter Thiel and Sean Parker, who co-founded Napster and was Facebook’s first president.

Other participants included Redpoint Ventures, Thrive Capital, D1Capital Partners, Spark Capital, Coatue Management, Iconiq, Altimeter, Lux Capital, A* Partners and Definition Capital.

Ramp intends to use the new financing to accelerate development of its finance automation platform, designed to help businesses save time and money. On average customers save 3.3 per cent annually by switching their corporate card spending to Ramp, it said.

“We founded Ramp with the intent to empower businesses. Ramp’s mission is to save our customers time and money so they can focus on their mission,” said Mr Glyman, the company’s chief executive.

“Frankly the current state of finance tools and legacy card programs is not acceptable. They trap finance teams into doing unproductive ‘busy work’. This funding will allow us to automate away even more of those tasks so that finance teams can focus on being more strategic,” he added.

Stripe, which was founded by Patrick and John Collison in 2010, introduced its own corporate card in 2019. Stripe itself raised an additional $600 million earlier this year at a valuation of $95 billion, making it the most valuable privately owned companies in the world.