April 22, 2024

Bounce back

Hi there, 

Ramp’s valuation is on the up. 

The spend management platform raised a $150M Series D extension, led by Khosla Ventures and Founders Fund, at a $7.65B valuation last week.

That brings its total equity funding to nearly $1.2B on top of $700M in debt financing. 

And its valuation has now rebounded 32% from its 2023 down round.

Ramp plans to put the funding toward deepening its AI capabilities as well as M&A.

The company has made a few acquisitions already: 

1. Venue (1/30/2024) - procurement
2. Cohere.io (6/26/2023) - AI customer support
3. Buyer (8/24/2021) - “negotiation-as-a-service”

Per Ramp’s acquisition insights on its CBI profile, the company is moving beyond its origins as a corporate card startup with a focus on broader “finance automation.”

Given its heightened interest in M&A, we decided to help Ramp’s corp dev team out a bit and use CB Insights to find some M&A targets for them. 

Here were our criteria: 

• Early-stage
• In the expense management/procurement/etc. space
• Commercial Maturity level of 1 (Emerging), 2 (Validating), or 3 (Deploying)
• Hasn’t raised since 12/31/2022
• Based in the US

Given Ramp’s prior acquisitions were early-stage, we identified 85 targets along similar lines. Here are a few examples:

1. Streamlined (backed by Greycroft) - Accounts receivable (AR) automation
2. Oddr ($2M seed round in October 2022) - invoice-to-cash management for legal sector
3. Pactum ($20M Series A in December 2022) - AI vendor negotiation
4. OpStart ($2M seed round in October 2022 at $10M valuation) - financial operations for startups

CB Insights customers can access the complete list of 80+ Ramp M&A targets here.

Another area Ramp might look at is the crowded procurement negotiation/SaaS management space, where consolidation seems likely. 

This includes Vendr (which last raised funding in February 2022 and laid off 25% of its workforce a year ago), Tropic, or any number of competitors in this crowded space as highlighted below.

Ramp is not the only company looking to build an “all-in-one” spend platform for finance teams.

Two other notable players here are Brex (last valued at $12.3B in 2021) and Navan (fka TripActions, valued at $9.2B in 2022), both of which are building out their spend management functions.

From the HR side, platforms like Rippling are also encroaching.

It’s clear from our conversations with software buyers that they want bundled solutions: 

With pressure on valuations, consolidation is inevitable in the expense management software market.

It’ll be interesting to see if AmEx, Capital One, JPM Chase, or others might jump in and try to snatch up some tech and talent on the cheap.

We made a prediction on who American Express might acquire here.

I love you. 

Anand 

@asanwal 

P.S. The answer to our last (and final) edition of guess the company was ByteDance.

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