An increasing number of fintechs claim to be using artificial intelligence to get ahead. Just how many of them are truly using the technology to improve the experience for their customers, however, is less clear.
In the spend management space in particular, two of the largest players, Ramp and Brex, have been vocal about how they believe AI will transform the way they operate and serve their customers.
Ramp announced on Wednesday a new integration with Copilot, Microsoft’s brand of generative AI technologies. Ramp says its plug-in with Copilot for Microsoft 365 means businesses don’t have to bounce between multiple tools and applications to gather spend insights or set up advanced controls. Microsoft 365 is Redmond’s subscription productivity suite.
“Now they can use natural language to access Ramp’s smart AI assistant from their workspace and get the most advanced work done faster,” said Ramp CEO and co-founder Eric Glyman.
Users will be able to do things like issue new cards directly within Teams or set up and receive real-time alerts on employee transactions.
The company also announced a number of new features around extending Ramp’s capabilities to not just read queries, but also write answers and take the appropriate action, in context, based on the customer’s data.
This includes interacting with Ramp as a conversational agent. For example, according to Glyman, if a manager is chatting with a finance admin about raising the spend limit for their employee’s upcoming travel, the finance admin can tag the Ramp agent into the conversation and ask the bot to raise the spend limit to the specified amount.
Investing more in AI
Both Brex and Ramp claim to have been leveraging AI in various ways for some time.
Brex in particular said it has been using AI since inception across underwriting, fraud, receipt matching and merchant categorization, among other product areas. But it’s dialed up its AI investments over the past year, particularly in customer-facing scenarios.
In September, the startup launched Brex Assistant, a flagship product of Brex AI. Besides automating expense information collection, Brex Assistant also has the ability to do things like answer questions employees would traditionally ask their finance teams, such as how much they’re allowed to spend per day at a location off-site.
Co-CEO and co-founder Henrique Dubugras told TechCrunch+ that he believes “this is just the beginning of AI’s impact on rethinking from scratch on both the employee and user experience.”
“Since ChatGPT and these large language models launched a few months ago, we’ve all been paying a lot of attention to how the world’s going to change,” Dubugras said at a recent company-sponsored event focused on AI. “AI is going to help bring data from being unstructured and everywhere [in an organization] to structured in one place.”
Earlier this year, Ramp acquired Cohere.io, an AI-powered customer support tool. Glyman told TechCrunch at the time that Ramp’s mission to help companies spend less money and time can best be done “through the automation of work, providing data and intelligence.” He also said that “the majority” of Ramp engineers were already using AI.
More revenue?
Whether all this AI-related innovation actually contributes to the companies’ bottom line remains to be seen.
Both startups claim that by helping their customers save money and time, they will be able to better retain existing customers, and retain new ones, thus generating more revenue.
Ramp’s integration with Microsoft isn’t an additional paid subscription, so it’s not a direct revenue-driving product, for example. But Glyman says that typically when Ramp is more deeply integrated into companies’ existing tech stack, usage of Ramp’s financial tools — such as cards, bill payments and software — increases.
How much revenue growth new AI-related tools can deliver for the two unicorns is an important question, given that each has raised mountains of cash while private and are thus future IPO candidates.
Earlier this week, The Information reported that Brex saw its annualized net revenue increase by just 1% in the third quarter to $283 million, compared to $279 million in the second quarter. In the second and third quarters of last year, Brex’s annualized revenue was just under $200 million, according to The Information, which also reported that the startup was targeting an IPO in 2025.
Brex benefited from a post-SVB collapse surge in business earlier this year, but that seems to have tapered off. Brex would not confirm the financial figures reported by The Information, with a spokesperson telling TechCrunch+ that comparing business growth quarter over quarter is not how Brex looks at company growth.
But now one has to wonder, will every fintech become an AI company?
The spokesperson added: “Examining our year-over-year growth tells a significantly different story and shows how Brex compares favorably in this market. Year-to-date, three of Brex’s primary revenue drivers (card revenue, deposit spread revenue, and Empower revenue) are growing materially and we’ve seen over 80%+ YoY growth in gross profit.” Empower, the company’s software product, has seen revenue growth of nearly 50% this year, according to Brex.
The company declined to comment on IPO timing.
In August, Ramp raised $300 million in a funding round co-led by existing backer Thrive Capital and new investor Sands Capital at a post-money valuation of $5.8 billion. At the time, the company said it had passed $300 million in annualized revenue.
AI, AI everywhere
Of course, Brex and Ramp aren’t the only expense management companies leveraging AI in their business. In February, Navan claimed to be the first travel company to integrate OpenAI and ChatGPT APIs across its infrastructure and product set.
The company said it was using the generative AI technology to write, test and fix code with the aim of increasing its operational efficiency and reducing overhead. Also, through Ava — Navan’s virtual assistant — travel managers are able to personalize recommendations and increase traveler engagement, execs claim.
At one time, there was a running joke that every company would become a fintech. But now one has to wonder, will every fintech become an AI company?
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