Ramp at $60 billion, and what fintech growth is worth

Kirill, in June Ramp was worth forty-four billion dollars. On Friday Bloomberg reported it had raised one point eight five billion at sixty. Last summer it was twenty-two and a half. It sells corporate cards and finance software, and it’s now priced at about half of Revolut, which made two point three billion dollars before tax last year. So what is Ramp’s growth worth, next to Revolut’s profit?

That depends on which number you trust for each of them. Which is most of today, I think. You’re listening to Venture Place, I’m Kirill Parinov, and Kate’s here with me, like every week. This week it’s fintech.

Then let’s start there, with Ramp. What do we actually have?

One report, a good one. Bloomberg, on Friday, citing people familiar: Ramp raised one point eight five billion dollars of new money at a sixty-billion valuation. Dragoneer and Thrive Capital led it, and Founders Fund wrote a big check. Ramp hasn’t announced it itself yet. And Bloomberg didn’t say whether sixty is before or after the new money. On a round this size that’s a difference of about three percent, so I won’t lose sleep over it.

And it got bigger on the way. In September Bloomberg said Ramp was in early talks to raise about a billion at sixty.

Right. The price held and the check nearly doubled. I’d read that as more demand than they planned for, and it’s the best thing in the story.

It’s a lot of new money for them, too. If I add up Ramp’s three rounds last year, I get about a billion.

So nearly twice a whole year’s raising in one go. I’d only be guessing what it’s for, and Bloomberg didn’t say.

So why don’t you sound happy?

Because of the revenue number we have. The last one I can find is from early June, when Bloomberg’s data had Ramp past one and a half billion dollars of annualized revenue. Sixty over one and a half is forty times. Now Revolut. Its share sale in July valued it at a hundred and fifteen billion. CoinDesk, citing the Journal, had last year’s revenue at six billion and pre-tax profit at two point three. That’s a pre-tax margin of nearly forty percent, and about nineteen times revenue, for a business that already makes money.

Those aren’t the same kind of number, though. One’s a run rate from June. The other is a full year that ended ten months ago.

No, they’re not, and you’re right to catch it. If Ramp has grown since June, and it probably has, forty times is too high. If Revolut has grown this year, nineteen is too high as well. I can’t tell you either correction, so I’m using what’s been published.

And to be fair to Ramp, Dragoneer and Thrive will have seen a current number. We haven’t.

True, and that’s the uncomfortable part of doing this from the outside. They know the revenue, and they know what it’s made of. All we can read is the price they paid. And sixty says they expect the growth to keep going for a good while yet.

Or that somebody will pay more later.

That too. A primary round at sixty is the floor the next round gets measured against. If growth slows, sixty becomes the number everyone has to defend.

Then let me argue for Ramp. Thirty-two last November, forty-four in June, sixty now. And look at who’s paying. Dragoneer and Thrive are putting new money into the company. Revolut’s hundred and fifteen came from employees and existing holders selling their shares. Those are very different signals.

That’s a good point, and there’s a detail that helps you. Fidelity marks Revolut’s common stock at about nineteen hundred and twenty dollars a share, as of the end of July. The share sale was at two thousand and seventeen. So even Fidelity, which owns it, values it a bit below the sale price.

So if anything, Revolut’s price is the soft one.

Softer, maybe. It’s also the one with a profit under it, and it’s gone up fast too. Seventy-five billion last November, a hundred and fifteen in July. That’s about half again in eight months. And Revolut is heading somewhere Ramp isn’t, at least not yet. On Thursday Nik Storonsky told Bloomberg TV he’d favor a US primary listing if Revolut goes public. Reuters said any listing is still at least a year away. And in September it got conditional approval from the OCC for a US national bank, which it says will open in 2027.

Bloomberg’s headline had him coming for JPMorgan. He also wants to sell credit cards and loans in the US once the bank is fully licensed. And the OCC approval comes with conditions. Revolut has to put at least ninety-five million dollars of capital into the bank, and the approval lapses if the bank doesn’t open within eighteen months.

Which is a long way from where Ramp sells. And there’s nothing like a listing from Ramp, not in anything I’ve seen. With Dragoneer and Thrive writing checks this size, it doesn’t need one.

I’d push back on the comparison itself, though. One company sells to finance teams. The other is an app that, by its own count, more than eighty million people use for their money. Maybe forty times and nineteen times are both right.

Maybe. And this is where I’d need something Ramp hasn’t published: what the revenue is made of. My understanding is that a lot of corporate card companies earn most of their money on card fees, which rise and fall with how much their customers spend. Software subscriptions are steadier. I don’t know Ramp’s split. If it’s mostly software, forty times starts to make sense to me. If it’s mostly card fees, it looks a lot like a payments business with a software price on it.

Hm. That’s fair, and I don’t know the split either. Something else from this week, though. Not everything in fintech got a higher price. OKX extended its round at twenty-five billion before the money, with Ripple, Circle and Standard Chartered coming in. That’s the same price ICE paid in March.

So it isn’t as if every fintech is being marked up. And Ripple and Circle are crypto companies themselves, so I’d guess some of that money is strategic. Investors are paying for growth they think is still going, and they’re paying a lot for it. For Ramp, the price went up by more than a third each time, twice in a row.

And at the other end there’s Erebor, the bank Palmer Luckey and Joe Lonsdale started. The FT says it has passed seven billion dollars in deposits. At the end of June it had just over four.

That’s a bank growing deposits, so a different business, and the FT didn’t say on what date it passed seven billion, so I wouldn’t work out a growth rate from it. But it goes after some of the same customers, tech companies and their finance teams. I’d keep an eye on it.

Okay. Ramp at sixty. Yes or no?

Ramp is clearly growing, and new money at a higher price, with the round getting bigger, is a strong sign. I’m fairly confident about that much. Whether sixty is the right price, honestly, I’m about fifty-fifty. Forty times June’s revenue, without knowing what that revenue is made of, is a lot to ask, when the company that makes a real profit is priced at under half the multiple.

And what would get you off the fence?

A current revenue number from Ramp, with the split between software and card fees. If the software part is big and growing, I’ll come round to sixty. And if Ramp shows it’s making money, um, even better. Then the Revolut comparison stops working against it.

That’s fintech for this week. If you work with Ramp or Revolut, or you think we’ve got the comparison wrong, message us on WhatsApp. There’s a Contact us link on the episode page.

See you next Monday.