Fintech firms were well-represented in the W22 batch of Y Combinator, with 35 foreign companies and another 25 labeled as crypto-focused. At least four businesses – from three distinct locations – claimed to themselves as the “Brex for” their specific territory, which drew our attention. Brex is a corporate expenditure firm that just become a decacorn after raising $300 million at a valuation of $12.3 billion. Brex began by focusing on delivering corporate cards to startups and small businesses. Its approach evolved over time with the goal of becoming a one-stop financial shop for these businesses.
It competes in a heated and increasingly congested market that includes, among others, Ramp, Airbase, and TripActions. Brex was founded by two Brazilian-born former adolescent hackers who were just 22 years old at the time when the firm was valued at over $1 billion. Some of Brex’s competitors have followed in its footsteps. The ramp has rapidly increased it is spending volume since its introduction, garnering large sums of money in the process. TripActions pivoted into corporate spending from an initial nexus in the business travel industry, whereas Airbase took a somewhat different approach to the area, focusing on SaaS rather than on transaction earnings. Pluto, on the other hand, just collected funds to become the “Ramp for the Middle East.”
The fact that the US market can sustain so many competing businesses gives you an idea of how big the market is. Other nations and regions may follow suit, and startups are taking notice, with a number of them vying for a piece of the corporate spending pie. Henrique Dubugras and Pedro Franceschi met when they were 16 years old and shared a passion for coding as well as common frustrations with their conservative moms, who didn’t comprehend their Mark Zuckerberg-like goals.
To be honest, their mothers’ concerns about their kids’ hacking activities only grew when they received letters of patent infringement. At the absolute least, a legal warning from Apple, which Franceschi got after finding the first iPhone jailbreak, is enough to trigger a grounding. Their parents pleaded with them to stop hacking and playing online games. The now 22-year-olds are raising $125 million in a Series C round for their second successful payments company, Brex, which has a $1.1 billion valuation. The investment was headed by Greenoaks Capital, DST Global, and IVP, bringing their total raised to over $200 million.
Headquartered in San Francisco Brex offers corporate credit cards to business owners without requiring a personal guarantee or deposit. It’s also backed by PayPal co-founders Peter Thiel and Max Levchin, former Visa CEO Carl Pascarella, and a slew of top venture capital companies. In a statement, IVP’s Somesh Dash stated, “Brexit is… one of the most exciting starts we’ve ever witnessed.”
