Ramp

Klarna

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.

Klarna

Klarna makes money from merchant fees and consumer interest. Merchants pay Klarna 3-6% of each transaction — they're willing to pay because Klarna increases conversion rates by 30%+ and average order values by 45%.

On "Pay in 4" (interest-free installments), Klarna makes money purely from merchant fees. On longer financing (6-36 months), Klarna charges consumers interest up to 25% APR.

Klarna also earns revenue from its shopping app (affiliate commissions when users discover and buy from merchants), and from its Klarna Card.

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.

Klarna

Sebastian Siemiatkowski, Niklas Adalberth, and Victor Jacobsson were students at the Stockholm School of Economics. In 2005, they entered a startup competition with an idea: let people buy things online and pay later.

At the time, online shopping was still new and most people were terrified of entering their credit card details on the internet. The idea was simple — Klarna would pay the merchant immediately, and the customer would get an invoice with 14-30 days to pay.

The competition judges hated it. The idea was dismissed as financially irresponsible and the team didn't win.

But Siemiatkowski pressed on. Swedish e-commerce was growing fast and merchants were desperate for any way to reduce cart abandonment.

Klarna's "pay after delivery" model was a hit because it shifted the risk — customers could receive the product, try it on, and only pay for what they kept.

The first customers were Swedish e-commerce merchants selling fashion and home goods. Klarna handled the invoicing, fraud detection, and collections.

Merchants saw conversion rates jump because customers were more willing to buy when they didn't have to pay immediately.

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.

Klarna

Klarna grew by being embedded at checkout. The strategy was to sign up the biggest online retailers and become a payment option alongside Visa and PayPal.

Once Klarna was at checkout, consumers discovered it organically. The "Pay in 4" button became ubiquitous across fashion, electronics, and home goods retailers.

The Klarna app became a growth engine beyond checkout. By building a shopping app where users could browse products, discover deals, and track deliveries, Klarna turned from a payment method into a shopping destination.

The app has 35+ million monthly active users who start their shopping journey inside Klarna before even visiting a retailer.

International expansion was aggressive. Starting in Sweden, Klarna rolled out across Europe, then into the US, UK, and Australia.

The US became the biggest growth market — American consumers were especially receptive to Pay in 4 as an alternative to credit cards. By 2023, Klarna had 34 million US users.

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.

Klarna

The valuation collapse was humiliating. Klarna raised at a $46 billion valuation from SoftBank in 2021.

One year later, they raised a down round at $6.7 billion — an 85% haircut. It was the most dramatic valuation drop in fintech history.

Employee stock options were underwater. Siemiatkowski had to lay off 10% of the workforce.

The entire BNPL category went from hot to radioactive in months.

Credit losses are the existential risk. Klarna is lending money to consumers who want to buy things they can't afford to pay for right now.

When the economy slows, defaults rise. Klarna's credit losses hit $1 billion in 2022.

The company had to tighten underwriting significantly and pull back from riskier markets. The tension between growth (approve more loans) and profitability (reject risky borrowers) defines every quarter.

The IPO in 2025 was a comeback story but with caveats. Klarna went public at $15 billion — a major recovery from the $6.7 billion trough but still less than a third of its 2021 peak.

The company finally turned profitable by slashing costs with AI (replacing hundreds of customer service agents with AI chatbots) and tightening credit standards. But investors remain cautious about the BNPL model's long-term sustainability.

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.

Klarna

Pay in 4 is the signature product — split any purchase into four interest-free payments over six weeks. Pay in 30 lets customers receive the product first and pay within 30 days.

Financing offers longer-term payment plans with interest for larger purchases. The Klarna App is a shopping destination — browse deals, track orders, manage payments, and earn cashback.

The Klarna Card is a physical Visa card that lets users Pay in 4 anywhere. Klarna Creator is a platform for influencers to earn commissions sharing products.

Klarna AI is their customer service chatbot that handles two-thirds of support queries.

Ramp

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

Klarna

Sequoia Capital, SoftBank, Silver Lake, GIC, Atomico, Commonwealth Bank of Australia, Heartland