Among today’s myriad fascinating fintech start-ups is Ramp, which automates business finance. The company started out with a product for business expense management and a goal to use that product as a backbone on which to build additional automation products. In this episode of Talking Banking Matters, we talked with Ramp cofounder and CEO Eric Glyman. The following edited transcript presents highlights of the conversation.
Matt Cooke, McKinsey: Ramp entered the scene barely three years ago and has managed to grow quickly to become a disruptive force currently valued at $8.1 billion. Started by three cofounders who sold their previous consumer-facing app to Capital One, Ramp began with a corporate payment card tied to a platform that seeks to allow businesses to save money and track expenses better, and offers employees an easier process for managing their expenses. The company’s stated mission is to “extend the lifespan of businesses with intelligence and automation.” The New York–based company was named Most Innovative Finance Company of 2022 by Fast Company and one of America’s Best Startup Employers for 2022 by Forbes.
We talked with Eric about his journey from offering a consumer-facing service to a commercial service, how he got the idea for Ramp, and how the company fits into the larger picture of business finance automation.
Eric Glyman, Ramp: We describe ourselves as a finance automation platform. All our products are built with the intent of helping businesses spend less time and spend less money. We help the average company cut their expenses by 3.4 percent per year and speed up their month-end close, which for most businesses is eight to 15 days, generally cutting that on average by about a week.
The kinds of businesses we serve are really broad and diverse. We started out targeting small businesses and start-ups. But today we serve a number of public companies and late-stage private companies, and some of our largest deployments are for companies with 5,000-plus cardholders. So it has really expanded in a lot of ways.
Beyond the value proposition to business owners, a lot of what we do helps employees. When you think about the travel-and-expense experience, the world that most people know is you take out your card, buy dinner, get a receipt, and you wait. You can’t go into the expense app because the receipt won’t pop up there until at least a day later. If you’re good about it, you upload your receipt, you say who you were with at dinner, and you move on. Most people get there about a month later, it turns out. On Ramp, that experience is quite rapid. You swipe a card, the expense policy is checked at the moment of transaction, you get a text when the receipt is still in your hand, you snap a photo. So we’re really automating that experience for employees, streamlining the experience for finance teams and professionals, and at the end, helping businesses run more efficiently and make a dollar go a little bit further. What used to take an hour you can get done in minutes.
Matt Cooke: For businesses, adopting new solutions for activities such as expense tracking is often thought of as being too painful to make switching to a new service worth it. Here Eric talked about how Ramp answers this challenge by focusing on streamlining their customers’ experience.
Eric Glyman: We started going deep and talking with finance teams. It turned out that their problem was not the card itself; it was broken processes for expense recording. So one of the first intents was, could we help streamline between what historically was two, three, or four sets of products to do one thing, which was maybe collect receipts and close books. It resulted in this pretty unique go-to-market strategy. It was not, “Would you like to try this card?”; it was “How can we upgrade your systems to condense and speed up your month-end close?”
Then later, we built a lot of software and streamlined experiences to make that super fast. So today, if you’re a small business, something you can do through Ramp is you can actually link up your old corporate card, and we’ll pull past transactions cardholder by cardholder, as well as URLs of specific merchants. Actually, with one click, we can orchestrate and send out virtual cards by different vendors and show you things like what your rates are compared to others. It can be an opportunity for firms to identify what’s actually happening at a firm level, identify duplicate subscriptions, see where there’s waste, cut costs by leaving behind the expenses and recurring things you don’t want to take, and upgrading to something new.
Matt Cooke: Eric has a track record of helping customers save. Before Ramp, Eric’s first startup, Paribus, targeted consumers, helping them save money. After selling it to Capital One, he spent several years with that institution before starting Ramp. We asked him what made him make the switch from consumer to commercial services. It’s a shift that may sound like a big change, but he doesn’t see it that way.
Eric Glyman: It’s a related journey and story. At Paribus, a lot of the premise was we could turn data into savings for consumers and act on their behalf and best interest. So it was essentially an email app that consumers could sign up for and link an email account. In the background, Paribus would check for receipts, prices, guarantees. And if you bought a TV at Best Buy and the price dropped a couple of days later, they had price adjustment policies where if you asked Best Buy, you could get that difference back. So a lot of the first experience was that you could turn data into savings.
The next interesting thing that led to Ramp was we [Paribus] were bought by the credit card division at Capital One. So we got a front-row seat to learning much more than I ever would have known from the outside about how the credit card business works, what made it great, what made it innovative in some ways, and some of Capital One’s unique insights around underwriting, risk, and thinking through information strategies.
So first was what if you had this integrated card that was focused on helping people spend less? Could both parties be better off? Could you have a better margin business? And the second part of it was infrastructure-related things. It was seeing these two challenges combined with the last domino of development of modern infrastructure platforms, where developers effectively could tap right into the authorization layer of the card transactions and build things like you might on Amazon Web Services, like you might with other forms of software development where you could say, “OK, we want to influence what gets approved and denied.” Based on that, too, we could actually build slicker, more integrated experiences and reframe this in a product sense—not just as a means to move money, but payments, workflows, and experiences that are designed to help people spend less with the ability to iterate.
Matt Cooke: Ramp has grown quickly, even by the standards of the most successful payments and software companies. Eric attributes a lot of this to the structural choices they’ve made around how they build and the company’s ability to quickly serve customers’ expanding needs. Here’s Eric as he described how Ramp sought to be as fast and nimble as possible from the start.
Eric Glyman: From the get-go, we felt there was a need for an engineering-driven company that’s optimized for fast iteration and which would be built to offer experiences like those consumers have with, say, Amazon or Instagram or things that are constantly using data, upgrading, and moving. So first, could we make that a central design premise of what we wanted to do?
We tried to pull together a team that was optimized for that. When we look back to the first ten people we hired, seven were engineers, one was a designer, and one was focused on talent, just trying to find remarkable and extraordinarily talented people. And it was centered early around building the parts of the infrastructure, which needed to be highly robust and have extremely low latency. You could not take this down for things like card transactions. And if there was a financial consideration, such as ledgers, it had to be incredibly stable and really internalize the great lessons from Capital One.
On the other side, it should have things that should evolve really fast. It should be easy to change a web page. It should be simple if you want to go and spin up part of a web app. So we were trying to set up teams that were organized around either slow movement or very fast movement, depending on the tasks, and to think through the design needed behind it.
Last, we looked to organize around the problem we were looking to solve. We had this premise of, “We want to be aligned with the end consumer. We want to save them time and money.” We would ask them, “What wastes time for you? Where are you spending that you think you could be better off or spending less?” Based on that feedback, we ended up spending a lot less time on what the actual product and form factors would be, which I think is where a lot of competition-obsessed companies spend time.
That’s what led us down this path of going from a card with some built-in accounting to hearing people say, “We’re having trouble getting people to turn in receipts,” and we said, “Well, let’s understand why that is and then push this into expense management.” So a lot of our process was getting some of the founding principles right, asking questions earnestly, looking at the data, and then moving to building and trying to adhere to a kind of Henry Fordism—build a car, not a faster horse—and try to solve the problem.
Matt Cooke: Fintechs like Ramp constantly add new products and services, and as these start-ups grow, the question of what to build next can become complicated. Eric talked about how Ramp thinks about what to bring to market next.
Eric Glyman: When you start to think about the infrastructure of it, what is Ramp actually? Forget the form factor; what’s underlying some of it? It’s a host of services that tap into payment trails such as corporate cards to understand workflows through collecting data, whether it’s through texts, email, or integrations with partners like Amazon or Lyft. It’s the user interface we offer; it’s risk in underwriting services, and it’s accounting data labeling.
I think in some ways, some of what guides our philosophy is our North Star of saving people time and money. So we certainly have products today that are built around modern corporate cards that collect receipts and transactions and that plug into your accounting software with a built-in product, with 30-day charge card revolving credit.
There are a lot of ways where, if you kind of understand the nature of what’s happening not just within but between companies, you can generate insights that are useful for them. For example, benchmarking is an important service for companies. Another is Ramp for Travel, which we recently launched to be a zero-touch way for companies to understand where people are and do the work of associating trips. For Ramp customers today, they can book their travel, whether it’s on a managed travel platform or on Kayak, Expedia, or whatever they prefer, and based off that, Ramp is able to see from the transaction data, from receipt data, was it in or out of policy. And then we can look at what other transactions are associated, so automatically you can see hotels, Ubers, restaurants, associated specific trips. And we can automate things back from there.
Matt Cooke: One of the enablers of fintechs like Ramp is the advent of new payment processors that offer just-in-time funding, which opens up the possibility of retooling card authorization rules to allow greater flexibility of services offered. Eric explained to us how Ramp takes advantage of this innovation to offer customers greater card controls and deeper insights.
Eric Glyman: One of the differences that has a large impact on product is this question of how authorization rules are done on a card transaction. It allows us to build even finer-tuned rules engines based on transaction type. So we can do things like build on the basics of approving or denying a charge to insert even more software to allow end customers to approve or deny a charge based on the merchant.
It sounds simple and obvious, but it’s really hard unless you’re close to the transaction, because when merchants are billing cards, they don’t say, “I’m Uber,” it just comes through as a stream: UBR, star, and then a bunch of numbers and invoices. So you need to effectively map and build what the networks or the issuers haven’t built to be able to say, “That string is in fact Uber, and this end customer said this card should not be used on Uber,” or “I want to block this merchant.”
It’s a really simple infrastructure-based thing, but it unlocks the ability to have much more magical, intuitive experiences for customers, and it gives them a sense of control and a sense of capability. So, by actually getting down into the transaction-processing layer and being closer to the metal, you’re creating a backbone on which to build other great products.
Matt Cooke: For payments start-ups like Ramp that find initial success with one service or product and then quickly add others to answer customer demand, deciding what to build and bring to market next can be tricky.
Eric Glyman: I would say it’s not a perfect art form, but we spend a lot of time on customer demand and, in general, try to be diligent and consistent in taking notes. For every customer that ultimately decides to sign up for Ramp, we try to understand why they picked us. If it’s a no decision or they went with something else, why did we lose? What customer needs are “nice to have,” and what are “need to have”? What was a blocker? We try to map that back qualitatively—not just what they’re saying, but the underlying problem they’re trying to solve and orient and organize—as well as quantitatively.
That’s loosely the way we think about it. And then last, does it sharpen our value proposition? Does it help people save more time and money? Can we measure that?
By actually getting down into the transaction-processing layer and being closer to the metal, you’re creating a backbone on which to build other great products.Eric Glyman
Matt Cooke: Ramp has competition popping up around the world, and interestingly, the company is investing in some of these players. We asked Eric to talk about how Ramp views its competitors.
Eric Glyman: There’s this idea from the last era of start-ups that there will be one company that takes over a whole market. And it just didn’t fit our view of what actually played out, and it’s certainly not true historically. Amex, Chase, Capital One—they’ve been around for a lot of years doing just fine. So it never felt like winner-take-all should make sense.
The payments and financial services industries are deeply about trying to understand where your unique edges are. How do you exist within an ecosystem and create a truly valuable and differentiated product? Some of this is coming to, in order to deliver a simple experience for customers with a card designed for customers, fundamentally we had to partner with others. So even from the get-go in the US, that was a paradigm.
You kind of follow that. Today, we’ve grown a lot, but we’re still quite small. We could try to expand and hire and self-replicate, so to speak, in that way, or we could say, “Maybe there are alliances we can start to form, investments we can start to make, integrations we can start to explore, maybe joint go-to-markets.”
The payments and financial services industries are deeply about trying to understand where your unique edges are.Eric Glyman
Matt Cooke: Ramp is known for being somewhat of a talent incubator and producing new entrepreneurs. We asked Eric why he sees this as a net positive for his company, rather than a retention problem.
Eric Glyman: Whether you want to go really deep, build the firm out itself, take on a product challenge, or find different kinds of opportunities to explore and learn, you can do that. Or if you want to start companies—it’s a spin I think a lot of our team has an interest in. Maybe you’ll meet your cofounder here. Maybe you can see what great product development looks like, what truly extraordinary and fast-paced engineering looks like and be a part of that and learn from it.
So, in many ways, it’s first just trying to obsess over finding and recruiting extraordinary people. It was more designed around bringing together great talent, being a nexus and node. Great people tend to know and follow other smart people or hear about this and want to be part of it. So there’s a little bit of a virtuous cycle.
Matt Cooke: Ramp is headquartered in New York and started up just before the most crushing phase of the pandemic descended on the New York City area in early 2020, so it has mostly operated only in a remote or hybrid environment. It’s contrary to the stereotypical software start-up environment, which often features engineers crammed into a small space together for long hours. Eric and his team quickly had to adapt to working apart from one another, and remote and hybrid working are second nature to them.
Eric Glyman: We incorporated in March of 2019. We were about 15, 16 people when we launched in February 2020. I think 95 percent of the company functionally has been hired in and through the pandemic.
I think some of the principles that helped us get there were, one, if you can’t all be together and make decisions in one place or one spot, try to have a strong written culture of documentation. So, even today, we operate on Slack. We try to minimize and prevent private conversations to create a lot of discoverability. If you want to dig in and see old context, you can find threads. And we create a culture of just making things available; board decks are available, for example.
Some things still surprise us, though. If you’re just communicating through Slack, text, emails, or it’s a Zoom call about subject A, we sometimes realize people are missing some of the continuity. I think finding time to break that and get people together for creative sessions—maybe break the product and reform it—I think it’s quite hard to substitute in-person connectivity, getting together.
I think we’ll be hybrid forever. We have an office. People come to it. There’s no requirement. And that also means there are fewer people in the office. You don’t need to spend as much on New York office real estate, which can really add up. That lets you put the money saved into things like more frequent trips.
Once a year, we get a few houses in Vermont and Utah and do a monthlong ski trip for anyone who wants to come. We have “Camp Ramp” in upstate New York, where once a year for a month, we get a big house for a kind of retreat, where people can go and spend time.
Matt Cooke: Ramp’s bold approach to corporate expense management and finance automation is intriguing—and indeed exciting for those who would love to have a simpler, faster way to file work expenses and manage receipts. It will be interesting to watch how Ramp and its offerings evolve, given the landscape they operate in: B2B payments revenue growth actually outpaces consumer revenue growth. Corporate card volumes are growing 11 percent per year, and virtual card payments at 16 percent per year. This volume will likely see increasingly fierce competition, with established fintechs, banks, and newcomers entering the fray in the coming years. We look forward to watching Ramp’s story continue to unfold and to following how its talent-factory approach serves the company and what effect it has in the larger payments and start-up ecosystem.