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Businesses of a certain size have to contend with challenges around T&E (travel and expenses), an abbreviation for a category of expenses that generally includes travel and transportation, meals, entertainment, and gifts. According to research from Forrester, T&E is among the most difficult costs to control, with 80% of the companies surveyed by the firm saying that they use a time-consuming, error-prone manual system (as of 2014). A 2019 report from Nexonia — which, it must be noted, sells expense reporting software — aligns with Forrester, finding that it takes nearly half of organizations eight days or more for expense reports to be submitted, approved, and reimbursed.
The demand for automated solutions has accelerated the growth of the T&E management software market, which Grand View Research expects will be worth $17.4 billion by 2017. Among the most popular vendors are Certify, Concur, Yokoy, TripActions, and IBM, but startups have emerged in recent years to take on the incumbents, including Karmic Labs, Payhawk, and Divipay. Ramp is one of the larger upstarts in the space, having snagged $300 million in a series C financing round last August. Today, the company announced an even larger round — a $750 million mix of equity ($200 million) and debt ($550 million) — that values Ramp at $8.1 billion post-money.
Automating expense reporting
Manual T&E reporting isn’t time-consuming just because it requires entering items into a spreadsheet. It also necessitates that employees compile reports and make sure that their requests are compliant with company policies. On the management end, companies have to try to predict the costs of an event or trip, usually by estimating what travel, lodging, and other fares might cost.
New York-based Ramp, which was founded in 2019 by Glyman, Gene Lee, and Karim Atiyeh, aims to abstract away this type of management with virtual and physical payment cards geared toward T&E tracking. Ramp’s tools allow companies to control employee spend with rules, limits, blacklists, and approvals. In addition, they show spending insights that combine elements of reporting and accounting.
Glyman previously cofounded Paribus, a price-tracking app that was acquired by Capital One in 2016. (Glyman stayed on at Capital One until 2019 as CEO and senior director of Paribus’ U.S. operations. Atiyeh was the CTO at Paribus. Lee, another Paribus alum, started as a software engineer at Paribus and was promoted at Capital One to senior manager of engineering within the Paribus division.
“Much of the industry is misaligned with the best interests of customers, designing points systems that incentivize companies to spend more than they planned, and shipping cumbersome software that wastes employee time. Ramp is the first in the industry to design its products to help companies spend less money and time,” Glyman told VentureBeat via email. “We work from a very broad set of invoice data, standardization across documents, and feedback from users to improve our models to save customers time and money.”
Ramp collects and verifies receipts to offer payouts for expenses like mileage, meals, and incidentals. The platform also automatically spots duplicates and categorizes expenses by dimensions like time, category, department, and employee. Ramp’s bill pay feature, which was recently introduced, uses AI to streamline the process of paying suppliers. Users can upload or email bills to have the platform analyze them and autopopulate vendor information, line items, and payment details.
Building on its acquisition of procurement startup Buyer, Ramp offers access to consultants who help to negotiate on companies’ behalves for savings. The consultants look at a company’s spending on expenses like laptops, cloud computing, software-as-a-service plans, IT infrastructure, office space, insurance coverage, and furnishing and try to establish procurement goals. Once introduced via email as the company’s procurement team, the consultants kick off the negotiating process with a report that shows spending trends and where the company could potentially be saving money.
More recently, Ramp rolled out Ramp for Travel, a set of automations and integrations that focuses on simplifying trip expense reporting. (For example, when an employee books a Lyft ride, Ramp for Travel can automatically capture the receipts and report metrics like the frequency of rides.) And just last week, Ramp announced a partnership with Amazon Business, Amazon’s procurement portal, to generate receipts for purchases, auto-categorize transactions, and launch new spend controls.
While there’s been a growing interest in T&E management solutions among the enterprise, a fair number of companies are clinging to old-fashioned, manual methods. A 2018 survey by Certify found that 18% of businesses with more than 1,000 employees and 34% of mid-sized businesses are using spreadsheets for managing employee expenses. Of the latter group, 12% admitted to relying on pen and paper.
Glyman asserts that these companies will make the switch once the benefits of T&E management software become clear to them. He agrees with studies like Aberdeen’s, which notes that, when making claims and recording costs, workers who use smartphones and other devices are generally 17% more on par with compliance standards and spend more than $8 less per expense report.
In an interview last year, Andrew Bartels, former VP and principal analyst at Forrester, told VentureBeat that he believed there was “little to differentiate” Ramps from the competition. As then, Glyman pushes back against this notion, pointing to the volume — $5 billion of annualized payments — of processing that Ramp has reached.
“We’ve delivered over $130 million in savings for our customers to date. We’re helping companies close their books in eight hours instead of the industry median of eight days — freeing up 3.5 million hours of manual work. None of our competitors can say the same,” Glyman continued.
Ramp — which has raised $1.37 billion since its founding in March 2019 — claims to have quadrupled its workforce over the past year to over 275 people. Its customer base stands at more than 5,000 businesses, which drove revenue to increase nearly 10 times in 2021. Cardholder growth reached 15 times year-over-year, while usage of Ramp’s bill pay feature doubled every month in 2021.
Within the next few months, Ramp plans to open a new office in Miami.
“This funding will accelerate development of our finance automation platform, on the heels of Ramp for Travel and other features that fully automate expense management,” Glyman said. “Ramp is building the next generation of finance tools — from corporate cards and expense management, to bill payments and accounting integrations — designed to save businesses time and money with every click … Ramp competes, and wins, against established billion dollar players like American Express, Concur, Bill.com, and Expensify, which aren’t innovating in the best interests of their customers.”
Founders Fund led Ramp’s latest round with participation from D1 Capital Partners, Thrive Capital, Redpoint Ventures, Coatue Management, Iconiq, Altimeter, Stripe, Lux Capital, Vista Public Strategies, Spark Capital, Definition Capital, General Catalyst, Avenir Growth Capital, 137 Ventures, and Declaration Partners. Of the debt financing, $300 million came from Citi and $150 million from Goldman Sachs, which doubled its commitment to a total of $300 million.
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