Ramp

Instacart

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.

Instacart

Instacart operates as a marketplace connecting consumers with personal shoppers and grocery retailers. Revenue comes from multiple streams: delivery fees and service fees charged to consumers (typically $3.99+ per delivery), tips to shoppers (passed through, not revenue), retailer partnerships (grocers pay Instacart for access to the platform and fulfillment services), and advertising.

Advertising has become the crown jewel. Instacart Ads lets consumer packaged goods (CPG) brands like Coca-Cola, Procter & Gamble, and Nestlé pay for sponsored product placements within the Instacart shopping experience.

When someone searches for "chips," Doritos can pay to appear first. This is incredibly valuable because it's advertising at the exact moment of purchase intent.

Ad revenue was $871 million in 2023 and crossed $950 million in 2024.

The retailer partnership model is key. Unlike DoorDash or Uber Eats (which listed restaurants without permission early on), Instacart works with grocers as partners.

Over 1,500 retail banners including Costco, Kroger, Albertsons, and Publix have formal partnerships. Instacart provides the technology and shoppers.

Grocers provide inventory and stores.

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.

Instacart

Apoorva Mehta was a 26-year-old Amazon engineer in Seattle who quit his job in 2012 to start a company. The only problem: he had no idea what to build.

Over the next year, he started and abandoned roughly 20 different projects. A social network for lawyers.

A way to track restaurant wait times. Nothing stuck.

Then one day he was too lazy to go grocery shopping. He looked for a service that would shop for him and deliver everything to his door.

Nothing good existed. The existing options were grocery store delivery services that only worked during specific windows, had limited selection, and required ordering days in advance.

Mehta wanted to order groceries the way he ordered everything else online — immediately, from whatever store he wanted.

He built a prototype in 2012 and applied to Y Combinator. The demo was rough — he ordered a six-pack of beer through the app and had it delivered to a YC partner's house during the application process.

It worked. He got in.

Instacart launched in the San Francisco Bay Area in 2013 with a simple promise: order from your favorite local grocery store and have someone shop for you and deliver within an hour.

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.

Instacart

Instacart grew by solving a problem one city at a time. They launched in San Francisco, proved the model, then expanded to other major metros.

Each new market required recruiting shoppers, signing up retailers, and building enough consumer density to make the economics work.

The COVID-19 pandemic was the inflection point. Grocery delivery went from luxury to necessity overnight.

In March 2020 Instacart announced it would add 300,000 shoppers, then raised that by another 250,000 weeks later. Order volume increased 500%.

Years of planned growth happened in weeks. The pandemic proved that grocery delivery wasn't a niche — it was the future of how a significant chunk of the population would shop.

The enterprise play is the long-term moat. By providing white-label technology to grocers, Instacart becomes embedded in their operations.

Even if a grocery chain wanted to build its own delivery service, they'd need years and hundreds of millions to replicate what Instacart provides. The more deeply integrated Instacart becomes in grocery operations, the harder it is to rip out.

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.

Instacart

The post-COVID hangover was brutal. After pandemic demand normalized, growth slowed dramatically.

The company's valuation dropped from a peak of $39 billion in early 2021 to about $10 billion at IPO in September 2023. Investors who bought at the peak saw a 75% paper loss.

The narrative shifted from "essential infrastructure" to "nice-to-have luxury."

Unit economics are perpetually tight. Paying a person to walk through a grocery store, pick items, bag them, and drive them to someone's house is expensive.

Unlike meal delivery (one restaurant, one bag), grocery delivery involves dozens of items per order, refrigeration requirements, and substitution decisions. Every order that requires a shopper to call the customer about an out-of-stock item eats into efficiency.

Amazon is the existential threat. Amazon Fresh, Whole Foods delivery, and Amazon's own logistics network represent a competitor with nearly unlimited resources and a Prime membership base of 200+ million.

Amazon has been willing to lose billions on grocery delivery to build market share. Instacart's advantage is retailer partnerships — Kroger and Publix use Instacart specifically because they don't want to help Amazon dominate grocery.

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.

Instacart

Instacart Marketplace — the core platform where consumers order groceries from 80,000+ stores for delivery or pickup, with personal shoppers fulfilling orders. Instacart+ — subscription service ($9.99/month) offering free delivery on orders over $35, reduced service fees, and credit back on pickup orders.

Instacart Ads — a retail media platform letting CPG brands run sponsored product listings, display ads, and coupons within the shopping experience. Instacart Platform (Enterprise) — white-label e-commerce technology that lets grocers build their own online ordering and fulfillment powered by Instacart's infrastructure.

Caper Cart — AI-powered smart shopping carts (from the 2021 Caper AI acquisition) with built-in screens, barcode scanners, and payment that let shoppers skip the checkout line.

Ramp

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

Instacart

Sequoia Capital was an early and consistent backer. Andreessen Horowitz invested in growth rounds.

D1 Capital Partners led the 2021 round that valued Instacart at $39 billion. Existing investors including Valiant Capital, T.

Rowe Price, Fidelity, and Tiger Global participated across rounds. Y Combinator was the starting point (Summer 2012 batch).

The September 2023 IPO on NASDAQ priced at $30 per share, valuing the company at approximately $10 billion.