Ramp raises $300M at $32B valuation, CEO Eric Glyman says the company is doubling revenue above $1B annually

the SEO. Uh, it will be fun. Well, we have Eric Lyman from RAMP in the reream waiting room. Let's bring him into the TV and alter. Eric, how are you doing?

Where's your yellow suit?

Why did you not get the memo? [laughter]

Oh my gosh, guys. I'm uh I'm on the road today, but um I'm going to be wearing my yellow suit all week. Um it's so good to see you guys.

Good to see you, too. Good to see you, too. uh give us the update. What's the latest? What happened?

It's so so today RAMP announced a $300 million raise at a $32 billion uh valuation.

Congratulations. [applause]

They've done it again.

The big question everyone wants to ask, the chat's going crazy. Is the job finished,

guys? The job is not finished.

[laughter]

Is that the third? Is that the third?

It is the fourth time we've asked.

No, no, no. I was going to say, is that is this the third financing this year?

Something like that. Yeah,

it is the fourth financing that RAMP has announced this year.

Okay, let's go. Congratulations. Um, yeah. What what So, so, so why what why this financing? Why this partner? Um, why this number? kind of break us through walk us through the the the thesis behind the round.

Of course. Um so I I think if you start look at the fundamentals of the business ramp is just competing in a category of its own. Um you know uh the company companies generally the bigger they get the more they slow down. Uh ramp is growing faster this year at significantly larger scale than we did last year. Uh so this is you know at over a billion dollars a year in revenue. uh the business is doubling uh it's generating cash and if you look at gross profit specifically which is a good metric of how efficient uh are the underlying mechanics of the business uh we're growing 10 times faster than the median publicly traded software company so it's just in a category of its own I think on top of this uh AI has just been an incredible accelerant uh for the business itself uh there's pull from from customers everyone is thinking about how can I uh take what's happening in AI and apply it to to my business and there's a push of these models are getting dramatically better and so outcomes like automated expenses uh automated accounting uh moving funds to higher yield for for customers are are just coming out of the box and so you know I I I would say if we were to sum it up um uh I think for uh many millennia uh money talked uh we're teaching money to think uh and I think the implications of that are are pretty profound um you know betterun businesses more profitable organizations and so that that's the first part the second part. Um we're absolutely thrilled to be uh deepening our partnership with Lightseed uh who led this round. I I think they're an extraordinary firm um led the rounds of many great companies. I think notably uh anthropics round earlier this year which has proven to be I think an uh one that's uh you know changed the industry quite a bit. Uh and I think they've just been a great partner in in deepening our thinking, helping us grow. Um and so we're we're very excited. uh talk about accelerating at scale. Uh this morning at breakfast, Jordi and I were reflecting on the fact that we were feeling this way even with our much smaller organization. We were like, "Wow, like it's only been a year." Uh and we feel like we were already losing some of the agility that we had when we were just three people. And we were saying like, "I understand." What was this thing you said? You said, "I understand why companies write down their principles because it's so easy to lose sight of what is important, what makes you great, what what you do specifically." And so I would love to know just your reflection.

Yeah. Even across this year, like a lot of us, the process of making the show better is us remembering the things that we did great early on and that you kind of end up losing your way in slight ways and then it's about remembering that and kind of coming back to it.

Yeah. So, I'd love I'd love to know both what are the things that make Gramp great, but then also your thought process for not losing that because I imagine you agree that that is important to have principles and re and redouble the focus on them.

I love that you asked about this because I think it gets to the heart of what we're trying to do um inside of the product, right? If you think about probably your your very first year, every dollar out of the organization was something you thought about. Um, someone wants to buy a software subscription, you know exactly why. Someone proposed to the consultant. It's a debate over it. Everyone knows who approved what. Uh, was this this this purchase worth it or not? And you know, years later, suddenly businesses just start happening to you. You're not happening to the business. Uh, things are renewing on autopilot. Um, uh, things you you thought carefully about or are just running on its own. And what we're really trying to seek to do in the product is when we say money that that that that that thinks, you know, it's the idea is that before funds leave your account, we understand the principles that you run your business and we check does someone have the permission to spend it. It has memory. So once the thing actually moves, you don't need to ask like why did we buy this thing? What was it? Like there's an audit trail of who approved it, budgets are updated, and then there's reasoning. And so we can actually start to show businesses um here's how you can get more of every dollar an hour. Uh, and so I think that's what's so different. You take things that used to be systems running to now there's checks in the system. And I think for us, it it's it's an interesting moment, right? We're uh as a company, we we launched our first product uh simple product card and expense um about 5 years ago. Uh today we're 2436 days old. We still count the days. And the reason is uh we want to be thinking about um you know with every day are we getting just a little bit more done or a little bit less done? uh in kind of this practice of uh thinking about kind of the passage of time uh auditing our calendars asking you know um you know um are we getting more work done uh with the same or less amount of effort uh goes a long way and then last I would say specific to to you guys um I think part of why I I we've just felt so proud to um work with both of you and call TVP our partners is I think there's this like unbelievable care of craft um uh I think there's It's not about who's done everything. It's like who can write great copy, who can think of funny ideas, how could we take an idea to, you know, we're we're doing it tomorrow. And I I I think that you guys have have really lived. Um I mean, people forget a year ago TBPN. I I don't even think you guys were called TVPN or was it show and you know, you've turned into something great. And so I I I I feel strongly you guys don't have a trouble with this. And uh I I think just emphasis on speed and quality and craft is been what I've seen of you guys. No, totally.

Uh, something I was thinking about, we were reading that Carpathy post earlier around how uh, software 1.0 was like kind of more general automation. Software 2.0 is you're automating tasks that are verifiable.

And I just feel like finance is like just like prime for verifiability, right? Because it's like, well, was this in in the policy or outside of the policy, right? Totally. So,

totally.

Um,

yeah. I' I'd love to know more. or is your policy incomplete, right? Um, you know, there's all these practices and you can actually start to learn based off of the actions. And I think something that's so unique is that every time um, you know, months close, um, uh, there is someone actually going in and saying this transaction is categorized here, this goes there, you can see if you grew your revenue faster, if you grew your cash flow faster, or if you didn't. And so there's this incredible feedback loop that allows uh, RAM to add more value. We think that's why the average customer that adopts ramp uh spends 5% less and also the the median ramp customer uh grew their revenue by 12% over the past year uh which is much faster uh than the median in the US and I think a lot of it comes from this learning.

So help me understand uh you're you're generating cash but you're also raising money you're implementing AI which can be very expensive. We've heard uh from Ivan at Notion that, you know, he saw a slight hit to his gross margins. It's still a fantastic business, but uh did actually see that show up uh in the income statement. Uh how is how are you thinking about the adoption of AI as a piece of the tech stack? Is it actually reshaping the financials at this point or is it something where uh you see it sort of just like another subscription just like another piece of the tech stack and it hasn't really change the way you think about the cost structure of your business? It

it's a really good question to zoom into and and in my general view has been fairly overwhelmingly positive. I mean, I I still think that for us, the goal is, you know, our goal is not to sell someone like a card or a bill payment software. It's to

um it's help your business run more profitably, right? And uh I I think a lot of what we're trying to do is if we can actually pay for software where the output is there's an hour of your uh of your time um that you don't of work you don't have to do anymore that's done by software, that's really great. Um, next I think about and you ask most um uh founders or or leaders in technology like what's the biggest constraint on your business? Everyone says I'm having trouble hiring engineers.

Um it's like I I want to hire great salespeople, great engineers and and if you can adopt software I mean we look at our sales team um you know the quota that folks on the sales team have is multiple times of our next closest competitor in part because we have a lot of tools we built to make our team um far more productive. um our engineers um are shipping about 50% more uh code to the codebase um than about four or five months ago. Uh and that's continued uh and so our general view is look if you can actually uh make the best even better um that's something we're gladly uh willing to pay for. Um and so in our business we've actually seen um you know margins expand as we've adopted this uh in part because we think that our our principle is let's create a lot more value than we capture. Yeah.

Um and and we're able to do that because we're we're creating much more value uh than it even months ago.

It just feels like Ramp is an agile new company that people love the product. And so it's just so much easier to say, "Hey, if you want a new AI powered feature, we have that on day one. You don't need to rip us out and go to something else." Uh you don't need to have some bolt-on. You can just get it all here. And so you can effectively uh like monetize whatever cost is coming through the actual uh token generation on your side pretty quickly.

How how do you how are you thinking about head headcount planning over the next few years? We don't have to zoom out to like 10 years. I think it gets extremely extremely fuzzy, but I'm curious if you care about uh you know, every every once in a while these sort of like

uh revenue per employee or or sort of like uh net income per employee like statistics start floating around. Uh I'm curious if you uh if you if you think about that at all and and obviously uh prof you know running running ramp as you know one of the most efficient uh companies in the world is really good marketing for the product. It's probably the best marketing that you can do. Uh but I'm curious how you think about about those things. It's exactly the right question because I I I think look when we kind of think about our operating model every year we try to increase the ratio of whether it's revenue contribution profit um margin per employee it's it's all to say like uh we we anticipate revenue is going to grow very very rapidly. Um uh uh and while employee headcount is going to grow it's going to grow a little bit slower and so the effect is you start to see this widening. and gives you more margin to uh invest in uh whether it's uh a use of AI itself that you can drive into the product um more marketing all those types of things to reach more customers. I I think more abstractly though um if you kind of step back you know most businesses in the US uh run are actually profitable might forget that in the valley but have an 8% profit [laughter] margin um um and we'll talk about this but you know it's like if you make a company more efficient um by like 1% it's equivalent to like an increase of uh you know $1 in savings is equivalent to $12 more in revenue um at an 8% margin just mathematically Uh, and if you can do this repeatedly, I actually think that there's um, you know, a you have a lot more businesses that are good but but don't have um this automation and and and and skill sets to grow uh much larger. I think a lot more companies will get bigger. And I also think that if it's just easier to run a business, I think more great businesses will get started. Um I think there's a lot of creative people out there uh who would be running organizations who I think as the tools to build get easier. Uh you see a more interesting world and and so uh you know I I I actually think it's it's a pretty important and really profound thing to knock out inefficiency to allow uh smaller companies to succeed. I mean even you guys are a perfect example. TVPN is a small team that's changed the media landscape and captivated the world and like I think that there are probably a lot of people where if you make the tools better like they will come. How do you uh how do you feel like CFOs are ranking like AI enabled software uh on their list of priorities when they're making a decision in this category? like is it because it it feels like there is some great stuff. There's some stuff that's commoditized, some stuff that you've built that's differentiated, but are are CFOs as a class uh sort of like, okay, I've checked the box, I'm exhausted with the narrative, or I'm just ramping up and I feel like I'm just starting to get value and I actually understand it. Um, or are they just learning what AI is for the first time tomorrow or today?

This is a this is a fun one. So, I I would say there's a few different types. I mean, sure,

I would say small and mid mid-size businesses just is like, look, um I want to run, you know, same business for less. I I want to grow, meet my goals, be more profitable. And uh I think for us, it's just, hey, it's an easier to use expense report. Um or or like you want to do expenses more, your card will do it for you. Sure. Um you don't need five tools to pay bills, run procurement, uh earn yield on your treasury. Um ramp will simplify that. But I think that for large customers, uh, look, I I think it's like 80% plus of the earnings calls of of the S&P 500, um, mentioned AI about 6 months ago, and I think it was 95, um, over the most recent quarter. It is 100% on the mind of, uh, uh, CEOs and CFOs. what they're wrestling with is, you know, there's a great study out of uh MIT in the fall that went fairly viral where said 95% of enterprise deployments um are not creating return on investment and I think part of why CFOs have been so enamored with ramp uh is you know we can demonstrate very very clearly um uh a for most customers it's pro it's product that pays you to use it in the form of cash back b it helps reduce your spend uh and c when you have all this time back from your sales force um to go and sell and not do lowv value tasks. Um it's a very easy business case. And so I I think this this ultimately like our focus is on saving people money. Um and that ROI focus makes it easy for them to buy. I think it's it's very important.

That MIT study, how does that track with what you guys have seen from various AI pilots? Because I think

I would imagine ramp doesn't even count on either side. I I wouldn't think of at like bringing a ramp into a company as like an AI pilot. I would see it as like a completely different thing. But are you the 5% successful or you just not even

if you were looking if you were talking with the team and the team's like 95% of our pilots haven't panned out, you'd probably be like, "What were you guys doing?"

Yeah.

Yeah. Yeah. Yeah. It is. You nailed it. So, one, I think that a lot of you hit this first phase of people who were like told they need to buy AI. They're like, "Fine, I'll give you some experimental budget. You'll go do it." people tried a bunch of stuff and I think you end up and I think this speaks to the importance of design where you'd end up with like disconnected tools. You have like a thoughtful chat like a great chatbot here this thing that kind of plugs into some of your codebase and others. And if you look at I think part of what's made ramp so effective is you know it's just a smarter card that happens to use AI. It's not telling you uh hey this is an LLM that categorized your transaction. This is an LLM uh that's read this 30-page invoice, detected it was fraud, uh told you not to pay for this. This is an LLM that detected you could be earning higher yield and moved it for you. It's just part of how it works. And I think this next phase and the AI native companies that are working very very well um have these deeply integrated products where it's not like some, you know, AI tool. It's just how it works. Um and so I think that's the distinction and you're right. Um for a lot of CFOs, it's hey, um we have this tool. it's going to help uh help us cut out waste uh and pay us cash back. Um

should we use it or not? And it's a pretty easy decision. Um yeah.

Yeah. Yeah. It might not even be in the category. Uh but it's still delivering AI properly. And I just love that that's I I feel like there's something very valuable about just using every possible tool AI or not or linear regression if that's the best tool for the job behind the scenes and then just delivering the actual value to the customer solving the problem because customers they don't necessarily want technologies they want solutions right

yeah is one of our our customers and um someone I look up to quite a bit um Brett um Taylor started company Sierra, chairman of OpenAI, I think he was on it um a week or two ago.

And one of the things he said is like, look, I don't want anyone at Sierra spending like time on expense reports or invoices. Yeah.

Uh and ramp is automated categories of work that used to slow us down and we actually can work on the things that makes us great. Um build a great product to write the business. And so I I I think you nailed it. it's solutions, not um

not actual technologies because most of the customers just just they they just don't have a strong opinion about the the underlying technology. They care about saving time, saving money. That's what matters. Uh well, congratulations. Thank you so much for taking time to be back next week. [laughter]

You're always welcome. That's why we bought these suits. We don't rent them. We buy we bought them

tailored because we knew we were gonna be using them a lot.

We're gonna be using them a lot.

Guys, it's so good to see you. Thank you so much. Have a great rest of your day. Uh yeah, incredible milestone.

We'll talk to you soon. Bye.

Cheers. [laughter]

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uh well we our next guest is uh Stacy Rexon. Welcome to the show. Thank you so much for stopping by.

Good to see you.

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