Ramp

Affirm

Ramp

Ramp makes money from interchange fees — the 1.5-2.5% that merchants pay on every credit card transaction. Unlike consumer cards that share interchange with users through rewards, Ramp gives a flat 1.5% cashback and keeps the rest.

The real business model is becoming the financial operating system for companies: once a company uses Ramp's card, they also use Ramp for expense management, bill pay, accounting automation, and procurement — all of which increase switching costs and customer lifetime value.

Affirm

Affirm makes money from two sources. First, merchant fees — when a retailer offers Affirm at checkout, Affirm charges the merchant 5-8% of the transaction value.

Merchants pay because Affirm increases average order values by 85% and conversion rates by 20%. Second, consumer interest — on longer-term loans (6-48 months), Affirm charges interest ranging from 0% to 36% APR depending on the buyer's credit profile.

The 0% APR loans are fully subsidized by the merchant.

Ramp

Eric Glyman and Karim Atiyeh had previously co-founded Paribus, a tool that automatically got refunds when prices dropped on things you'd already bought. Capital One acquired Paribus in 2016.

The experience taught them something: businesses were terrible at managing their spending, and the tools they used — corporate credit cards from Amex and Chase — were designed to encourage spending, not control it.

In 2019, they launched Ramp with a contrarian premise. Every other corporate card company made money by getting businesses to spend more (higher spend = more interchange revenue).

Ramp would make money from interchange too, but would actively help businesses spend less through automated expense management, duplicate subscription detection, and price negotiation.

The pitch to CFOs was irresistible: get a corporate card with 1.5% cashback, and we'll also find you an average of 5% savings on your total spending through our software. The card was the wedge.

The expense management platform was the real product.

Affirm

Max Levchin was one of the original PayPal Mafia — he co-founded PayPal with Peter Thiel and Elon Musk. After PayPal sold to eBay for $1.5 billion in 2002, Levchin built several companies including Slide (sold to Google for $182 million).

But he kept coming back to the same idea: consumer credit was fundamentally broken.

Credit cards were designed in the 1950s and hadn't meaningfully changed. They used opaque pricing — minimum payments that stretched debt over decades, late fees that punished the most vulnerable, and interest rates that compounded until people owed three times what they originally spent.

Levchin thought technology could do better.

In 2012, he founded Affirm with a radical proposition: transparent lending. When you buy something with Affirm, you see the exact total cost upfront — the principal, the interest, and the exact number of payments.

The total never changes. There are no late fees.

If you miss a payment, Affirm pauses your ability to buy more but doesn't charge you extra. The idea was to make lending honest.

Ramp

Ramp grew by selling savings, not credit. The pitch to finance teams was: "We'll save you more money than we cost you." In an era when every company was looking to cut costs, Ramp offered a corporate card that came with a free expense management platform that actively found savings.

CFOs couldn't say no.

The product-led approach bypassed traditional enterprise sales cycles. A finance manager could sign up for Ramp, issue cards, and start seeing savings within a week — no six-month procurement process, no IT integration project.

The free expense management tools were so good that companies switched from Concur, Expensify, and Brex just for the software, with the card as a bonus.

Speed of execution was the differentiator. Ramp shipped features faster than any competitor.

They went from a corporate card to a full financial operations platform in three years. Every quarter, Ramp launched features that competitors took a year to build.

By 2024, over 25,000 businesses were using Ramp and the company was processing tens of billions in annualized spend.

Affirm

Affirm grew by landing big merchant partnerships. The breakthrough was Peloton in 2019 — when Peloton offered Affirm financing at checkout for its $2,000+ exercise bikes, both companies exploded.

A huge portion of Peloton purchases were financed through Affirm. Then came Walmart, Amazon, Shopify, and Target.

Each major retailer partnership brought millions of new consumers.

The "no hidden fees" message cut through. In a world where every financial product has fine print, Affirm's transparency was refreshing.

Levchin made honesty the brand. Every ad, every checkout screen, every email showed the exact total cost with zero surprises.

Consumers who had been burned by credit cards were drawn to a product that treated them like adults.

The Shopify integration in 2020 was a game-changer. Shop Pay Installments, powered by Affirm, made BNPL available to hundreds of thousands of Shopify merchants instantly.

Overnight, Affirm went from needing individual merchant partnerships to being embedded in an entire e-commerce ecosystem.

Ramp

Brex is the obvious competitor. Brex launched two years before Ramp with a similar corporate card concept and had the first-mover advantage.

But Brex pivoted away from small businesses to focus on enterprise in 2022 — angering thousands of existing customers — while Ramp doubled down on serving companies of all sizes. The competition has become a case study in strategic focus versus strategic pivots.

The "spend less" positioning has a mathematical ceiling. If Ramp's AI genuinely helps companies spend less, the interchange revenue from those companies also decreases.

There's an inherent tension between the mission (reduce spending) and the revenue model (earn a percentage of spending). Ramp has managed this by growing the customer base faster than individual customer spending declines.

Enterprise sales is the next frontier and it's expensive. Moving upmarket from startups and mid-market companies to Fortune 500 enterprises requires a sales team, implementation support, and enterprise features that cost real money to build and sell.

Ramp has been investing heavily in enterprise capabilities, but competing with Amex and JP Morgan for large corporate accounts is a different game than winning startups.

Affirm

Peloton dependency almost sank the company. At its peak, Peloton accounted for nearly 30% of Affirm's revenue.

When Peloton's business collapsed after COVID — demand evaporated, the stock crashed 95%, and the company laid off thousands — Affirm lost its biggest customer practically overnight. The stock fell from $170 to $9.

Affirm has since diversified, but the Peloton lesson was brutal.

Credit risk is the fundamental challenge. Affirm is lending money to consumers.

If the economy goes into recession and people stop paying, Affirm takes the losses. Delinquency rates have crept up as the post-COVID economy normalized.

Unlike banks that have decades of lending data and massive balance sheets, Affirm is still proving its underwriting models work through a full economic cycle.

The BNPL category has attracted regulatory scrutiny. The CFPB has warned that buy-now-pay-later products can lead to debt accumulation — consumers stacking multiple BNPL loans across different providers.

Affirm argues its model is fundamentally different from competitors because it underwrites every transaction and never charges late fees, but the regulatory risk applies to the entire category.

Ramp

Ramp Corporate Card is the core — unlimited physical and virtual cards with 1.5% cashback and built-in spend controls. Ramp Expense Management automates receipt matching, policy enforcement, and reimbursements.

Ramp Bill Pay handles vendor payments and AP automation. Ramp Procurement manages vendor contracts and purchase approvals.

Ramp Intelligence uses AI to identify duplicate subscriptions, negotiate better rates, and flag wasteful spending. Ramp Flex offers flexible payment terms for businesses that need to extend their payables cycle.

Ramp Accounting automates close processes and syncs with QuickBooks, Xero, NetSuite, and Sage.

Affirm

Affirm Pay-over-Time lets shoppers split purchases into biweekly or monthly payments at checkout. Affirm Pay-in-4 is the interest-free option — four payments over six weeks with no interest.

The Affirm Card is a physical debit card that lets you use Affirm anywhere Visa is accepted, not just at partner merchants. Affirm Savings is a high-yield savings account.

The Adaptive Checkout technology shows each customer personalized payment options based on their credit profile in real time.

Ramp

Founders Fund, D1 Capital, Stripe, Goldman Sachs, Thrive Capital, General Catalyst, Khosla Ventures

Affirm

Khosla Ventures, Lightspeed Venture Partners, Founders Fund, Spark Capital, GIC, Baillie Gifford