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According to Ramp, the raised funds will go into more hiring and bolster its marketing efforts.
Fintech startup Ramp secured $115 million in a recently-concluded investment round led by financial and software company Stripe. According to an announcement on the 8th of April, the two-year-old company is now valued at $1.6 billion after the funding round. Another company that led the financing round is D1 Capital Partners.
Founded in 2019, Ramp offers corporate cards that are designed to help customers manage expenses. Ramp CEO and co-founder Eric Glyman said that Ramp’s feature, which helps users manage expenses, has helped average clients reduce lavish spending by $100,000 in last year. The company competes with other fintech companies such as American Express (NYSE: AXP), software company Expensify, SAP Concur, and Brex.
Ramp Reveals Plans for Raised Funds from Stripe and Others
According to Ramp, the raised funds will go into more hiring and bolster its marketing efforts. Also, the capital will go into partnerships and product development. The company’s CEO said that “it turned out to be just an incredible year for Ramp.”
The fintech market has been growing over the past year with an increase in the use of contactless payment technology during the global lockdown. At the pandemic’s peak, which led to a lockdown, people had to resort to e-commerce. Since then, top investors globally have been investing in fintech firms, infusing funds into startups. PitchBook Data revealed that fintech companies in the US had a record year for venture capital investments.
Ramp’s transaction volume jumped more than five times over the last six months. The company is constantly growing and now boasts of about 1,000 clients. Ramp’s clients include social media app Clubhouse, mortgage fintech Better, and non-profit organization Planned Parenthood.
In March, Stripe became the most valuable startup in the US after raising $600 million in a funding round. After the round, the company valuation stood at $95 billion after previously valued at $35 billion. Some of the participants in the round included Fidelity Management and Research Company, Sequoia Capital and. Others are Ireland’s National Treasury Management Agency (NTMA) and Baillie Gifford. As Ramp plans to use its funds for its marketing development, Strip also said the capital would expand its European business.
More Firms Grow amid Fintech Expansion
Also, Stripe saw an increase in online shopping since the beginning of the coronavirus pandemic. Stripe clients like DoorDash Inc and Shopify Inc recorded a significant rise in online shopping during the period.
Similarly, fintech Divvy also raised $165 million in recent funding in a Series D investment round. Held in January, the funding round pushed Divvy’s valuation to $1.6 billion. Apart from the company’s existing investors like Insight Venture Partners and others, more investors participated in the round. The new investors included payment giant PayPal Holdings Inc (NASDAQ: PYPL), Schonfeld, Whale Rock, and Hanaco.