Fintech: Ramp's down round

Fintech: Ramp's down round

As fintech valuations continue to drop, Ramp follows suit while raising an impressive $300MM.

SEP 4, 2023

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Hi Fintech Futurists —?

Here is today’s agenda:

  1. PAYTECH: Fintech startup Ramp raises $300M at a 28% lower valuation of $5.8B
  2. LONG TAKE: Down from $6B to $18MM, better for Better Mortgage to stay private (link here )
  3. PODCAST CONVERSATION: How AI-enriched data aggregation is empowering the next generation of financial institutions, with Envestnet's Farouk Ferchichi (link here )
  4. CURATED UPDATES


Digital Investment amp; Banking Short Takes

PAYTECH: Fintech startup Ramp raises $300M at a 28% lower valuation of $5.8B

Fintech unicorn Ramp’s latest round sees its valuation drop to $5.8B – a 28% mark down. The round totalled $300MM, led by Thrive Capital and joined by Sands Capital, bringing total funds raised since founding in 2019 to $970MM in equity financing and $700MM in committed debt funding. For context, Ramp’s previous round was $200MM at a $8.1B valuation during the peak of fintech fundraising. The valuation drop is favorable compared to what we’ve seen lately with other prominent fintechs like Stripe, whose valuation dropped by 40% to $63B , and Klarna, whose valuation dropped 85% to $6.7B .?

Ramp offers financial operations tools and infrastructure, including expense management, accounts payable, accounting automation, and global corporate card offerings. While still searching for profitability, revenue has quadrupled in the past year, surpassing $300MM on an annualized basis. The catalyst behind the growth has been Ramp Bill Pay, an accounts payable system that helps finance and accounting teams automate their bill entries, payments, and approval. Its notable features include the ability to extract key details from invoices using AI, financial controls, error prevention, and fraud minimization.??

Fintech funding remains relatively quiet with global funding volume down almost 50% to $7.8B in Q2, the lowest since 2017, which underscores the significance of being able to raise $300MM, even at a down valuation. Ramp’s recent business activity remains strong; it acquired AI customer success tool Cohere.io (its first acquisition), it brought on Shopify as a client, and it launched Ramp Plus, a procurement solution for large enterprises. All in, fundraising may be down but those rare platforms like Ramp, wihch have proven product-market fit and the ability to scale, are continuing to find capital to fuel their ambitions.


In Partnership: Webinar for Product, Fraud and Risk Officers

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?? September 7 at 2PM ET

Join this expert panel as they discuss the potential risks of dormant financial accounts and the importance of safeguarding unclaimed assets for financial institutions and account holders.

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Blueprint Deep Dives

LONG TAKE: Down from $6B to $18MM, better for Better Mortgage to stay private

Better Mortgage, initially a promising digital finance target known as BETR or Aurora Acquisition Corp., saw a 90% drop in stock value despite previously raising $500MM at a $6B valuation from major investors like SoftBank.

Founded around 2014, the company aimed to digitize the mortgage market, which had significant potential. However, issues arose with financial projections, dubious management decisions, and changes in the macro environment. This culminated in massive layoffs, revenue shortfalls, and a declining stock, highlighting the pitfalls of rapid scaling and market unpredictability.


Podcast Conversation: How AI-enriched data aggregation is empowering the next generation of financial institutions, with Envestnets Farouk Ferchichi

In this conversation, we chat with Farouk Ferchichi - President of Data and Analytics at Envestnet.

Farouk is a Senior Executive, a business leader, and a CDO 4.0 (a product-centric approach to the role of a Chief Data Officer according to Gartner) pioneer with over 20 years of proven success transforming businesses to create new data analytics products, markets, and business models that enhance customer experience, loyalty, and profitability.

?? Listen to Podcast


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Curated Updates

Here are the rest of the updates hitting our radar.

Payments


Neobanks


Financial Infrastructure


Investing


?? Insights Report

We would like to highlight an Insights Report from Fintech Nexus and Brighterion, a Mastercard company. In their survey of 100 financial institutions, they explore how financial institutions are using artificial intelligence for transaction fraud monitoring in the dynamic digital landscape.

?? AI Perspectives: Transaction Fraud


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Richard Turrin

Helping you make sense of going Cashless | Best-selling author of "Cashless" and "Innovation Lab Excellence" | Consultant | Speaker | Top media source on China's CBDC, the digital yuan | China AI and tech

1 年

Great read Lex, I really enjoyed the contrast between Ramp and Better Mortgage. One still able to command reasonable investment even if a downround, while the other is on life support, a shadow of its former self. Such is fintech! Love what you do and as always: SUBSCRIBE! I do and love it!

Efi Pylarinou

Top Global Fintech & Tech Influencer ? Trusted by Finserv & Tech Global ? Content & Influencer Services ? Advisory for Digital Transformation ? Speaking ? [email protected]

1 年

Always a great read.

Subroto Mukherjee

Generative AI| Innovation |CPTO| Thought leader| Strategist| CxO Advisory| Intelligent Automation| Advanced Analytics |Product Management| Digital Transformation| Web 3.0 | CPG | Fintech | Retail |Healthcare | Startups

1 年

Lex Sokolin good summary. FinTech and TechFin will continue to grow may be at a more sensible valuation. But, there is lot of promises for it.

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