Why we invested in Ramp
Cohort-based analysis is powerful, but I remember the pain of building it myself in my previous role as FD of a B2C startup (Citymapper). I had to aggregate data from various tools into excel, then build a model, which would easily have dozens of rows for a basic monthly analysis. If I wanted to add more granularity such as segmentation by platform (iOS vs Android), country or other demographic data, the model would reach hundreds of rows, and this was before introducing weekly or daily cohorts. You get it, doing segmented cohort-based analysis in excel is manual, complex, hard to build/maintain and so very time-consuming. As a result, this type of granular analysis is still not used enough by CFOs and finance teams for historical analysis, let alone for planning and forecasting.
Generally, producing accurate revenue forecasts is hard and business critical, especially in a recessionary environment. While already complex to do for B2B companies with recurring and predictable revenue streams, the level of difficulty s much higher for B2C companies with non-subscription and fluctuating revenue. Management and finance teams spend a lot of time inaccurately forecasting B2C revenue through manual and static spreadsheets, which leads to missed targets and opportunities, incorrect resource allocation and millions wasted. Finance is typically not at the top of the priority list of valuable data science resources and CFOs therefore lack the tools to forecast quickly and accurately, a pain I experienced first-hand at the two B2C companies I previously worked at (a marketplace and a mobile app).
Enters Ramp, a platform that empowers finance and management teams with data science to make forecasting data-driven and real-time. Ramp has developed data science models and software that automates user and revenue forecasting: it is like conducting a new budget cycle each day. Indeed, they provide very granular cohort-based forecasts (segmented by day, platform, demographics, geo etc.) impossible to replicate in spreadsheets (model explained here). Other key features include scenario planning, issue identification (when performance does not meet expectations) and performance marketing optimisation.
Nice, but aren’t there other forecasting tools out there already? Most of the competition is actually still excel spreadsheets. Other existing tools typically focus on B2B companies and are more generalist FP&A solutions. Ramp differentiates by being more focused (on B2C), more accurate (with its detailed cohort-based models) and more scalable with a faster time to value (a new customer can launch in days and get forecasts in minutes). Last but not least, we are very excited by the company’s vision of building the “source of truth” for the future (ie. the brain of businesses), evolving from predictive towards prescriptive and proactive analytics.
Ramp’s advantage also comes from the domain expertise and complementarity of its team. The company’s model and approach is based on the previous work of Angus Lovitt, Co-Founder and ex VP Marketing at King, where he helped drive an increase in revenue from $50m to $2bn. Angus was keen to automate and productise, through software and machine learning, the complex and manual cohort-based forecasting models he had been using in excel. Angus cofounded Ramp with Dan Marcus (CEO) and Jan Pickard (COO). Dan and Jan are long-time friends who previously founded and exited a SaaS ERP company, among other previous ventures. We loved their ambition and contagious conviction, but also their humility and collaborative nature. Dan and Jan complement Angus and each other well through their background in sales/go-to-market and product/engineering respectively. They have very strong values and are currently hiring for a variety of roles.
Finally, we were impressed by Ramp’s growth and traction while being bootstrapped and very capital efficient. Due to the team’s background, Ramp is currently mainly focused on the gaming vertical and its customers include a lot of great logos such as Space Ape Games, Netspeak Games, FRVR and more. It has been very exciting to witness how Ramp was described as a must-have tool for company forecasting and strategic planning.
AlbionVC is delighted to be co-leading Ramp’s $5m seed round with our friends at Eurazeo and the participation of Triple Point and many great angels. We look forward to the next steps of their journey of making the future known!
