According to co-founder Henrique Dubugras, Brex, which is valued at around $2.6 billion, “was never going to be just a corporate credit card company.” So today, the credit card for startups company announced its latest offering: Brex Cash, which minimizes the expense and tediousness of wiring money through a traditional bank.
Per the website, it will take Brex Cash less than a minute to wire transfer. And Dubugras told Crunchbase News that Brex Cash may be obtained by startups that weren’t eligible for the Brex credit card.
“Building a bank is difficult,” Dubugras told us. “So we built something better.”
— Natasha Mascarenhas (@ TC DISRUPT) (@nmasc_) October 2, 2019
What It Does
Before Brex cash, the company’s flagship offering was a credit card that could give loans to startups in spaces like retail, SaaS and life sciences. Now with the cash integration, Brex is looking to be a “bank account replacement.”
Dubugras, on stage, added that it traditionally costs $23 dollars to wire money. With Brex Cash, he said that it costs $0, and you get Brex Points, too.
He walked me through the process as a potential startup: As a new startup, if your investor uses Brex you can instantly get money from a new round. And then you can instantly layer in payments, payroll, and do whatever you would traditionally do. He said the bets of Brex are working: Scale.AI joined with Brex when it was only 4 people and at a seed round. Now it’s a unicorn, surpassing $1 billion in valuation.
A Funding Rewind
The San Francisco company most recently raised $100 million in a round led by Kleiner Perkins Digital Growth Fund. Existing investors also joined in, including Y Combinator Continuity, GreenOaks Capital, Ribbit Capital, DST Global, and IVP. Its total known funding to date is $315 million.
Back then, the startup said the new capital will be used to expand spending features and rewards. Per the website, there’s financing tailored for e-commerce startups or life sciences startups, offering points for lab equipment, for example.
It also said the new capital would fuel a broader audience. With its flagship offering, the credit card, Brex is already tapping into a crowd most financiers are too scared to bet on: risky, high-churn startups.
The most obvious competitor, Stripe, comes from the same Y-Combinator roots itself.
Early last month, Stripe, a payment processing behemoth, launched Stripe Capital touting quick loans and flat fees for startups needing capital. It also announced a credit card for startups.
Dubugras said that the Stripe card’s “similarity was quite surprising.”
“Every time an incumbent launches a product, the insurgent has to compete,” he added on stage at TechCrunch Disrupt, when TC reporter Kate Clark asked about what it would be like to go against a company with a longer lifetime. Dubugras pointed to Stripe doing multiple products, but for Brex, this card and cash “is their life.”
As both Stripe and Brex raised hundreds of millions the heels of each other, we’ll see which one convinces risky startups to take a bet on their alternative to banking.