True Value
Make No Mistake, Brex and Ramp Are Fintechs, Not Software Firms
Investors are at risk of overvaluing the competing corporate card companies, which are moving toward IPOs.
Fintech startups Brex and Ramp are hurtling toward initial public offerings as soon as next year as they duke it out over customers for their corporate credit cards. In the meantime, investors are getting excited about the companies’ rapid growth rates.
Their numbers are impressive, but investors need to temper their enthusiasm. Ramp just passed $1 billion in annualized revenue and was valued at $22.5 billion in its second fundraising this summer. Brex, which is growing at more than 45% a year, just crossed the $700 million mark in annualized revenue. Their gross profit margins, neither of which has been reported before, are solid, but may not justify the most recent valuations.