Ramp’s New Venture: Entering the Digital Banking Arena
Over the years, Ramp has become a prominent name in the corporate card and expense management sector. Beyond its initial offerings, the company has expanded into travel, bill payments, and other financial services, while successfully raising over $1.2 billion in venture capital. Now, the six-year-old fintech startup is embarking on a new journey, venturing into digital banking with its latest product: Ramp Treasury.
In essence, Ramp Treasury aims to provide customers not just with savings solutions, but also opportunities to earn money. CEO and co-founder Eric Glyman elaborates on this strategic move in an exclusive interview with TechCrunch. “We observed that checking accounts linked to Ramp were mostly earning 0.00% interest,” Glyman notes. The new Treasury product is thus designed to complement existing bank accounts, not replace them.
How Ramp Treasury Works
Ramp’s Treasury service allows businesses to store cash in a business account and earn 2.5% interest or potentially higher yields if invested in a money market fund. The liquidity of these funds ensures quick access for bill payments and other expenses. Glyman emphasizes that while Ramp is not a bank, it collaborates with banks like First Internet Bank of Indiana and Apex to offer these services.
Navigating a Competitive Landscape
The fintech sector is bustling with competitors such as Mercury, Brex, Navan, Rho, and Mesh Payments. Notably, Brex had once considered becoming a bank but decided against it. While Ramp isn’t aspiring to be a digital bank per se, its entry into treasury management signifies a substantial step forward, potentially enhancing its profitability.
“We are becoming a one-stop shop for our customers,” Glyman explains. This move enables businesses to consolidate their cash flow rather than juggling between several accounts.
– Eric Glyman
Financial Growth and Future Prospects
Currently, Ramp keeps its revenue figures under wraps, but past disclosures highlight significant growth. In March 2023, Glyman shared that Ramp’s revenue had quadrupled in 2022, driven by the expanding bill pay segment. The company surpassed $100 million in annualized revenue by March 2022 and projected $300 million by summer 2023.
Today, Ramp boasts over 30,000 customers—double from the previous year—and has facilitated more than $50 billion in transactions across cards and bill payments. Revenue streams include interchange fees from card swipes, transaction fees on bill payments, SaaS revenue from upgraded services, foreign exchange fees from international transactions, and affiliate fees from travel bookings.
Maintaining Stability Amid Market Fluctuations
Despite market challenges affecting valuations across the fintech industry, Ramp has maintained its workforce without layoffs. A recent funding round brought its valuation close to previous peaks at $7.65 billion. The company reached the milestone of 1,000 employees by the end of 2024.
“We are focused on building a robust business—whether private or public,” Glyman mentions hinting at long-term plans for an IPO.
– Eric Glyman
Conclusion
Ramp’s foray into treasury management marks a significant shift towards integrated financial solutions for its clientele. By enabling businesses to maximize their earnings while managing cash flow efficiently, Ramp is positioning itself as an indispensable ally for modern enterprises navigating the financial landscape.
