Over the years, Ramp has built a reputation in the corporate card and expense management space. The company has expanded its business to include travel and bill payments, and has raised more than $1.2 billion in venture funding.
Today, the six-year-old fintech startup announced a different kind of expansion: a move into more digital banking territory with a new product called Ramp Treasury.
In a nutshell, Ramp's purpose is to give customers a way to not only save cash, but also make money, CEO and co-founder Eric Glyman explained in an exclusive interview with TechCrunch.
“When we looked at the checking accounts and deposits our customers had linked to Ramp, we found that the majority were earning 0.00% interest,” he said. Ramp Treasury is designed to work alongside, rather than replace, a customer's existing bank account, Glyman added.
Ramp's new Treasury product allows businesses to keep cash in a corporate account for a 2.5% return, or in a money market fund for potentially higher yields . Cash held in business accounts is liquid, so you can quickly access cash to pay your bills, he said.
Greiman emphasizes that Lamp, like other fintech companies operating in this space, is not a bank, but rather partners with banks to provide its services. The startup partners with First Internet Bank of Indiana for cash deposit accounts and Apex for investments.
Ramp operates in a crowded field with many competitors, including Mercury, Brex, Navan, Rho, and Mesh Payments. Brex, perhaps the most famous company, had applied to form a bank several years ago, but later chose not to pursue that path.
Ramp, on the other hand, is not aiming to become a digital bank. But Greiman said the step toward offering financial accounts is a big step for Lamp and is expected to improve Lamp's bottom line. It also helps become a one-stop shop for customers by allowing them to keep more of their cash in one place rather than moving it between different entities and accounts.
For now, the company has remained quiet about sales figures. In March 2023, Griman told TechCrunch that Lamp expects its revenue to quadruple in 2022, driven by its fastest-growing bill payment segment, but still remains at a profit. He said that there was no. The company announced that its annualized revenue will exceed $100 million before its third anniversary in March 2022, and that it will exceed $300 million in summer 2023.
Today, Mr. Grimman would reveal only that Lamp now has more than 30,000 customers, up from about 15,000 at this time last year, and supports more than $50 billion in combined card and bill payments. Ta. About 18 months ago, that number was closer to $10 billion, Lampe said.
The company primarily generates revenue from interchange fees charged for each swipe of a lamp card and transaction fees for bill payments. We also earn SaaS revenue from customers who upgrade to the Plus service through international money transfers and affiliate commissions when they book flights and hotels through our travel products.
The addition of the Treasury product also allows Ramp to earn spreads from partner banks on the total balance of all funds held in a customer's business account.
“We pass a lot of that back to our customers in the form of advertised rates of return, but we maintain some economics to ensure profitability,” Greiman said.
Ramp is one of the few major fintech companies that hasn't had to lay off employees in recent years, but like most companies, its valuation has fallen significantly from its previous highs. Last April, it raised $150 million in a round led by Khosla Ventures and Founders Fund, giving it a post-money valuation of $7.65 billion. This funding brings the company closer to the $8.1 billion valuation it achieved in March 2022.
Greiman said the startup will have over 1,000 employees by the end of 2024, up from 730 employees at the time of the acquisition last April.
Looking ahead, Grimman said Lamp is considering an IPO in the long term.
“We’re just trying to build a great business, whether it’s private or public,” he said.
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