New York-based Ramp has signed a string of agency, co-working space and ridesharing partnerships, but it looks like venture capital firm General Catalyst may be pulling the strings and driving its debut into travel management.
With business trips returning, corporate card and expense platform Ramp is doubling down on its shift towards helping companies manage their travel, not just receipts.
The US startup announced on Monday it had raised $750 million, some of which will be used to help it expand further into travel management following new partnerships with Spanish corporate travel agency TravelPerk and Flight Centre’s Corporate Traveler, as well as Lyft and WeWork.
These tie-ups form part of its new platform, Ramp for Travel, launched last month. The idea is that with these agencies, Ramp automatically collects receipts from any bookings, removing the need to submit expenses. It’s a change in direction following August’s $300 million fundraise where it addressed the challenges of managing remote workers.
“Business travel is inherently complex, an exceptional expense platform can massively improve it,” said a Ramp spokesperson. “We’ve built a solution to help companies gain a new level of insight and control over their travel without sacrificing the flexibility of travel options, whether it is managed or unmanaged. With Ramp for Travel, employees can book anywhere and Ramp will enforce the company travel policy.”
It’s a classic example of a company seeing the potential to win new business by targeting chief finance officers. Now Ramp is gearing up for the pent-up demand in business trips, which one travel agency said was soaring as countries remove Covid-related restrictions for international arrivals.
The Notable Travel Investor
Of the $750 million Ramp has raised, $550 million comes from debt financing, including $300 million from Citi and $150 million from Goldman Sachs.
Of the remaining Founders Fund-led $200 million round, many of the original backers have returned but investor General Catalyst is among the new entrants. This is the same venture capital firm that led a $115 million fundraising round in TravelPerk in January. As part of that deal, Joel Cutler, General Catalyst’s co-founder and managing director, joined TravelPerk’s board.
Cutler co-founded Kayak in 2004 with Paul English and Steve Hafner. Booking Holdings (then known as Priceline.com) acquired Kayak for $1.8 billion in 2012. Ramp has a long-standing relationship with General Catalyst, as Cutler led the firm’s investment into Paribus, a startup previously started and sold by Ramp founders Eric Glyman and Karim Atiyeh.
“We will always look to market leaders to provide guidance on travel, as they do to us on finance automation,” added the spokesperson. “This is especially prevalent as we enter a new phase of business travel. We’ve intentionally launched Ramp for Travel with key partners for managed travel, one of which is Travelperk.”
Ramp’s extra push into corporate travel comes as bookings bounce back. Travel management platform CWT has seen a “significant increase” in travel to and from several countries that have recently relaxed testing and quarantine requirements for international travel.
Outbound bookings in India, for example, climbed 64 percent, while inbound bookings are up 139 percent, since it announced on Feb. 10 that vaccinated travelers from 82 countries would no longer need to show a negative test result or isolate. Norway, which put an end to testing for all travelers, has seen weekly outbound and inbound bookings rise 72 percent and 67 percent, respectively, since Feb. 12.
TripActions said travel spend on its Liquid card platform had increased 1,700 percent year-over-year, with an 80 percent increase in travel spend from January 2022 to February 2022. While Ramp looks to travel, TripActions is continuing to develop its expense platform, and last week launched a new “auto-itemization” tool that automatically splits transactions and attributes each line item to specific expense policies, a product it claimed was an industry first.
Ramp said travel expenses for its own customers increased from 2.2 percent in January to 6.2 percent in November.
CWT also said UK weekly bookings for outbound international travel had increased 115 percent since the country announced on Jan. 24 January it would scrap testing for fully vaccinated travelers from Feb. 11. Feb. Inbound bookings rose 169 percent compared to the week before the announcement. However, with shadow of the Ukraine war looming over in Europe, the UK saw its biggest fall in domestic and international business travel last week since the start of 2022.
Ramp, though, seems to spot an opportunity to grow its travel-related division. It said it now has 5,000 businesses on its platform, and it processes $5 billion of annualized payments volume. The company has raised $1 billion in financing since launching in 2019, and plans to open an office in Miami later this year.