Apr 12, 2021

US company Ramp is the latest fintech to hit unicorn status

Fintech
ramp
Unicorn
corporatefinance
Joanna England
2 min
US company Ramp is the latest fintech to hit unicorn status
The two-year-old startup reached the target following its latest funding round...

The New York-based fintech, Ramp, has reached unicorn status after its latest funding round. The new funding drive of $320m, brings the technology startup’s total valuation to $1.6bn.

Ramp was founded in 2019 by the same entrepreneurs who launched Paribus, a consumer finance fintech that was acquired by Capital One in 2016. The company, which has confirmed $115m in investments from Stripe, Capital Partners, Goldman Sachs, Thrive Capital and more, is focussed on innovating and disrupting the corporate spending field.

The new funds will be used to boost Ramp’s growth strategy and innovate new products. Those in development include new features such as cutting-edge card controls, accounting automation and automated savings. With the recent hire of former Stripe and Goldman Sachs executive Colin Kennedy as chief business officer, the company will also grow its partnerships, sales, and marketing efforts.

Ramp’s solutions revolve around creating corporate cards that are designed to save businesses money. Ramp’s solutions include managing spending from the ground up to improve control over spending and save time on transactions. Ramp provides higher card limits coupled with savings opportunities, accounting integration, automated expense management and receipt matching services 

Ramp market challenges

According to reports, Ramp is emerging as a direct competitor of corporate finance giants like American Express and Brex. However, its innovative solutions are disrupting the corporate spending market because the platform’s USP includes card usage analytics that reveal excess and unnecessary transactions. Data suggests that up to a third of Ramp’s users were formerly customers of American Express, while 90% of clients have started using the services as their integrated spend management platform, effectively ousting other companies including Concur and Expensify. 

The combination of low interest rates on unlimited cashback and high spending limits but with spend control, has proven popular with clients globally with Ramp’s transactions rising by 400% since November 2020. 

Over the past six months, transaction volume on Ramp has grown by approximately 400%. A third of Ramp customers switched over from American Express, and more than 90% of customers adopted Ramp as a comprehensive spend management platform, replacing Expensify, Concur or manual alternatives.

Speaking about Ramp’s recent rise to success, Keith Rabois, partner at Founders Fund, says “Like Square, Paypal, and Strip e, Ramp is rapidly emerging as a generational fintech company. Though it launched publicly just one year ago, Ramp is already viewed as the obvious choice for efficient spend management at the fastest-scaling, highest-performing startups.”

He added, “We are pleased to welcome Stripe, an innovative company that we deeply admire, to the Ramp team.”

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Jun 10, 2021

FIVE things fintechs must do to keep investors onboard

Fintech
Investment
venturecapital
AI
Brandon Rembe, CPO, Envestnet...
4 min
Fintech innovations drew in first-time investors who reshaped the markets. What new advancements will help them continue their rise?

New investors flocked to the stock market during the COVID-19 pandemic. Thirty-eight percent of investors said they had never had a brokerage or similar account before opening one in 2020.

Low or no-fee trading options have helped accelerate the trend – nearly half of new investors said they accessed their account primarily through a mobile app. As FinTechs, how do we create the trust needed to keep new investors in the market and create a fruitful customer experience for them?

The financial industry does a disservice to individual investors if we merely offer tools that focus on making money quickly, an approach that usually backfires. Instead, the surge of interest presents an enormous opportunity for those who want to help more consumers use financial technology to educate them on responsible spending, saving, and investing in order to achieve financial wellness current fintech tools have welcomed individual investors in the door.

Now, it’s time to focus on education and improving their experience going forward. There are several ways those of us in fintech can step up to shape the future of retail investing so that it works better for everyone, starting with the following areas.

Equal access to financial wellness education

Financial health should be available to everyone — but today, not everyone has the educational resources to achieve it. One study shows that only 3.9% of students from low-income schools were required to take a personal finance class. What they aren’t learning in school or from family members, fintech companies can provide on their platforms.

The companies should move from solely offering financial services to a more responsible model of education, advice, and prescriptive choices to help consumers develop better habits and make wiser financial decisions. Not only can they empower consumers and bridge historical wealth divides, but they can also stimulate growth by opening up new consumer segments.

More personalisation

Just as we’ve come to expect that our fitness routines are tailored to our individual bodies, we’re also ready for finance tools that go beyond one-size-fits-all solutions. But only six percent of financial institutions say they’re using the kind of technology that allows them to deliver a deeply personalized experience. Fintech tools need to reflect that financial success looks different for each of us.

For one consumer, it may mean providing guidance on how to pay off student loans early; for another, it may mean prescriptive actions that enable them to stick to a budget for the first time; for a third, it could look like prioritizing environmental, social and governance (ESG) investments, so that her portfolio aligns with her political beliefs.

Now, we are seeing financial technology beginning to meet the demands of personalized finance in a substantial and meaningful way.

The rise of AI-Powered Advice

Big-picture advice and predictive guidance used to be a feature of high-end financial advisory firms — a perk only available to those who could afford it. But thanks to rapid advancements in data analytics and artificial intelligence (AI), that kind of holistic advice is now more accessible than ever. AI-driven robo-advisors can parse many different streams of financial information, delivering customized answers to key questions: Is it time to buy a home, or is it smarter to keep renting? Can I afford to take out another student loan?

Intelligent connectivity powered by AI can anticipate consumers’ needs and next steps, making proactive suggestions that guide them along the path to financial wellbeing. Fintech companies can also help consumers identify when their financial picture becomes too complex for a robo-advisor, and help them find a human financial advisor to meet their needs. 

Focus on financial mental health

New investors are quickly finding that the market can be overwhelming. That’s not surprising, financial anxiety is common and studies show that financial stress can have an impact on mental health for some.

It’s not enough for fintech companies to give retail investors access; they also must provide the guidance and support that help consumers manage their financial well-being. Educational tools can ensure that consumers are well informed about their options.

Predictive analytics can anticipate consumers’ questions, serving them key information and insights before they ask. Features that emphasize a comprehensive notion of financial well-being, rather than short-term wins and losses, can also help ensure that consumers are keeping their eyes on the bigger picture.

Gamification for good

The surge of gamification apps has done an impressive job making investing as engaging as playing a video game or joining a social media platform.

Much of the current use of gamification emphasizes short-term thinking, but there’s also an opportunity to help consumers think more broadly about their overall financial picture. One example is peer benchmarking, a feature that enables help consumers to see how their financial habits compare to those of friends and fellow consumers.

Gamification can also be used to incentivize making smaller, smarter choices — for example, rewarding saving over making an impulse buy.

The future of fintech is about more than just broadening access to the markets. It’s about making sure more individuals have access to the tools that can help improve their financial well-being—in the ways that suit their own circumstances and needs. The potential to act within their own set of individual priorities, with their long-term financial wellness in mind is much more empowering to a consumer than simply relying on short-term, high-risk investments.

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