Ramp Vs Bill.com

Ever since reading Bill-A-Bear by Packy McCormick, which contrasts Bill.com’s product quality with it’s distribution model, I’ve been a bit skeptical about an investment in bill.com. https://www.notboring.co/p/bill-a-bear

In the article, Ramp is named as Bill’s fast growing competition. Now, Ramp is principally a competitor to Divvy, and is trying to muscle in to Bill’s core bill pay services by offering those features for free. Still, they don’t have the distribution partnerships with Bank of America or CPA.Com that are driving bill.com’s viral growth.

So is there anything to worry about?
I found this case study on Ramp’s website: https://www.notboring.co/p/bill-a-bear

In this case study, Sandboxx was able to replace Amex, Expensify, and Bill.com (all 3!) with just Ramp, creating very nice efficiencies. Reading this sort of thing makes me wonder, is Bill.com on borrowed time?

I’m interested in hypergrowth in the moment and continued dominance into the future. If Bill isn’t a category crusher, it’s amazing growth is bound to slow sooner, rather than later. I have to ask myself, is it worth getting on for this ride? How comfortable do I feel getting onto the steepest S curve out there, knowing that this S-Curve might go on for a while, or it might cut out real fast. Is bill.com a Shopify, or is it a Lightspeed?

Anyways, this is why I’m not a shareholder in Bill.com. Feel free to tell me why I’m wrong.

Watch List: MDB, UPST


I think this space is growing enough to have two winners. At the same time, Ramp’s valuation on a P/S basis is much higher than Bill.com’s. Therefore, I’m happy to buy a company with deep relationships, with good management ready to defend their turf at the discount.

Once Ramp is no longer trading at a premium, or Bill no longer at a discount, I’ll be much less confident.

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Consider the source, really what else would you expect to find on Ramp’s website? If you tuned into the conference call, Mr. Lacerte claims that BILL is primarily competing with pen, paper and Excel. Even if Ramp is a contender, there’s an awful lot of SMBs out there and don’t forget, BILL is already international.

But, if you are going to ask the question about what’s the best place for one’s investment dollars irrespective of BILL’s competition, you might come up with an answer that doesn’t even include BILL.

At present I have middle-ish position in BILL. I might sell it and move the money to S or MDB or … Thinking about it.

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Haven’t done a deep dive on BILL lately, and this isn’t going to be a highly technical response.

I believe the Bill-Bear article, which is undated, is over 1.5 years old circa Nov/DEC 2020. All the numbers are stale. More importantly, the Accounts Receivable software that the author was talking about was in its infancy. BILL started as an accounts payable software. Accounts receivable was a new product around the time of the article. It may not have been a cloud product at that time. Digital payments also was in its infancy then. Look at how BILL’s business has grown its revenue since Nov-Dec 2020. Was the author right about BILL’s future business growth?

On Ramp, it is a private company and not public, right? Who the heck knows what their numbers are or if they are real. They are getting pumped by VC money and promoted by the VCs.