CNBC found that start-up Ramp is tracking publicly traded competitor Bill.com with a free invoice management and payments platform.
The start-up has grown rapidly this year by offering small and medium-sized businesses a cashback card paired with software that shows customers ways to save money. Ramp says transaction volume has increased 50% in the two months since the company last raised funds, at a valuation of $ 3.9 billion.
To sustain this growth, the New York start-up is targeting Bill.com, a fintech company that automates the processing and payment of invoices, said Ramp CEO Eric Glyman. Paying bills is a time-consuming, practical, and error-prone process for most companies, he said.
“Our software takes minutes to type and much more to make sure you’re doing the right things in seconds,” said Glyman. “Finance teams are tired of using three or four systems just to make payments and close their books.”
It took Ramp a year to develop the feature that uses an artificial intelligence technique called optical character recognition to extract information from invoices and fill out forms automatically. Feedback from some of the hundreds of customers who used bill payment in the pilot has been positive, Glyman said.
While Glyman estimates its competitor has a small fraction of the overall odds, Bill.com’s market cap has grown from less than $ 3 billion to about $ 30 billion in less than two years.
Bill.com shares fell 4.7% on Tuesday.
Ramp is giving away its software in the hope that it will lead to new customers and deeper relationships with existing customers, Glyman said. About 20% of Ramp customers use Bill.com’s services, he said.
“The current plan is that we want to start doing this completely free of charge for anyone who signs up,” said Glyman. “I think that’s pretty annoying, but it’s great for customers.”
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