The American fintech, which offers a credit card for start-ups and SMEs, has just completed a $100 million round of financing. Its valuation now stands at $2.6 billion.
After concluding a Series C fundraising round, led by DST Global and Greenoaks Capital in October 2018, which enabled it to achieve unicorn status, Brex is back in the news with a new $100 million round, concluded in the form of debt, with Barclays Investment Bank. These funds should enable the start-up to target large corporations.
Helping companies ignored by financial institutions
Founded in March 2017 by Henrique Dubugras and Pedro Franceschi, Brex has established itself as an interesting alternative for fast-growing companies that are unable to pass the usual filters of banking establishments, particularly when they wish to obtain a business credit card. Indeed, founders and managers, unable to provide convincing balance sheets, are often asked to provide personal guarantees that they are unable to provide because of their irregular income.
A business credit card for start-ups and SMEs
To address this dilemma, Brex launched a business credit card for startups and SMEs in June 2018. Decisions to award this card are based primarily on the company's ability to raise funds, and the reputation and quality of the investors involved in the deal. If the applicant meets these criteria, he or she will receive an answer in just a few minutes.
Brex's success is due not only to its card, specially designed for start-ups and SMEs who have been left behind by traditional banks. To further meet the needs of its customers, the fintech has introduced an automatic expense reconciliation function. The aim is to offer companies a consolidated view of their expenses.
Brex's success is due not only to its card, specially designed for start-ups and SMEs who have been left behind by traditional banks. To further meet the needs of its customers, the fintech has introduced an automatic expense reconciliation function. The aim is to offer companies a consolidated view of their expenses.
Brex expands its scope
While Brex was originally aimed at technology companies, it now enables online brands and retailers to "bypass the problems of traditional banking systems". Brex business credit card holders can benefit from an open line of credit with interest-free loans and 60-day payment terms.
With its latest fund-raising round of €100 million, Brex intends to support its international growth and compete with traditional banking players such as Citibank, American Express, Capital One and Wells Fargo. The fintech could offer other financial products that are still inaccessible to startups and SMEs. Indeed, the market targeted by Brex is still wide open.