Name: Amrita Raj

Roll No: B-08

Subject: SNVM (CCA No.2) – Entrepreneur Analysis
Specialization: Marketing
COMPANY : BREX
INTRODUCTION OF THE COMPANY:
Brex is rebuilding B2B financial products, starting with a corporate card for technology companies. They help
startups of all sizes (from recently incorporated to later-stage companies) to instantly get a card that has 20x
higher limits, completely automates expense management, kills receipt tracking and magically integrates with
their accounting systems. Brex offers corporate charge cards to early stage technology companies. The Brex
corporate cards are issued by Emigrant Bank. The Brex valuation was US$2.6 billion on June 11, 2019.
Brex was founded by Henrique Dubugras and Pedro Franceschi, two engineers who previously founded
Pagar.me, one of the largest payment processors in Brazil with over $1.5 billion in GMV. Brex is backed by the
co-founders of PayPal (Max Levchin and Peter Thiel), Y Combinator, Ribbit Capital, Yuri Milner, and Carl
Pascarella (former CEO of Visa).
Brex is building the next generation of B2B financial services with better tech and without the restrictions of
legacy technology.

INTRODUCTION OF THE FOUNDERS:

Henrique Dubugras:
Henrique Dubugras is Co-Founder & CEO of Brex — the first of its kind credit card for startups. A Brazilian
entrepreneur, Henrique built payments company Pagar.me — the Stripe of Brazil — when he was sixteen years
old. In just three years, Pagar.me grew to $1.5 billion in volume of transactions processed. Prior to Pagar.me,
Henrique built a number of online businesses in Brazil including an online education company and an online
dating application. His first engineering role was at Ingresse, a Brazilian online events management company, at
the age of 14.
Pedro Franceschi:
Pedro Franceschi is Brazilian Entrepreneur and Software developer known for being the co-founder of Brex, a
company that offers corporate credit cards to startup companies in the tech industry. He has been featured in
Forbes 30 under 30 along with his collaborator Henrique Dubugras.
Pedro was born and raised in his home country of Brazil and grew up in Rio de Janeiro for most of his
upbringing. When he was kid at the age of 9 years old he became passionate about Software engineering and by
the time he was 12 years old, he was able to unlock the iPhone 3G.
He briefly attended Stanford University before dropping out to embark on his mission to build his next project
Brex, which was accepted into Y Combinator's batch for Winter of 2017. By late 2017, the company secured a
series A by several private and accredited investors. In 2018, the company has raised a Series C in funding with
more than $182.1 Millions.
STATUS AND GROWTH OF THE COMPANY:
It has been a whirlwind 12 months for fledgling fintech startup Brex, which launched on June’17 with $57
million in funding from some big-name investors, including PayPal’s founders and Y Combinator. Brex, which
has created a corporate credit card for startups and scale-ups, raised another $125 million series C round in
October, at a valuation of $1.1 billion, and made its first acquisition (a blockchain startup, no less). It also raised
an additional $100 million debt round a couple of months back in a fresh round of funding, propelling the
company’s valuation to $2.6 billion.
It was only in October that San Francisco-based Brex became the latest fintech unicorn with a $125 million
capital raise led by Greenoaks Capital and DST Global at a valuation of $1.1 billion. This time around Kleiner
Perkins Digital Growth Fund was the lead investor with participation coming from existing backers including Y
Combinator Continuity, Ribbit Capital, DST Global, Greenoaks Capital and IVP.
Brex is among a crop of fintechs that are going after the business credit card market. With small and medium-
sized businesses largely ignored by the big financial players, fintechs have stepped up with a slew of digital
offerings aimed at disrupting the industry. These fintechs are rolling out virtual cards, digital expense
management tools and services geared toward transforming how credit is issued and used within a company.
Competition is fierce with American Express, Divvy and Bento for Business all going after the market. Brex,
however, has stood out in terms of its valuation and growth.
Henrique Dubugras, co-founder and co-CEO of Brex said what makes Brex different is its underwriting
process. Traditional banks look at the financial history of a company to determine if the business is
creditworthy. Brex underwrites the borrower in real time based on current data. It also built its underwriting
platform from scratch, not having to rely on an old legacy system like so many traditional banks do. That, said
Dubugras, prevents the banks from doing things like customizing rewards programs based on an industry or
looking at real-time data to determine a credit limit. “Everyday we’re reevaluating it and that allows us to give
higher limits, no personal guarantees and underwrite much faster,” said Dubugras. “Applying that to these
verticals has been a hugely successful value proposition.” The latest funding will be used to enhance the
corporate spend management features and reward offerings within the cards. Brex will also use proceeds to
enter new markets including credit cards geared toward life sciences companies.
Brex was born out of the frustration Dubugras and cofounder Pedro Franceschi faced when trying to get a
corporate credit card for their startup. Brex extends credit to startups based on the amount of money in their
corporate bank accounts. Early-stage startups have long had difficulty obtaining credit cards because they don’t
have revenue. Traditional credit card issuers often reject their applications, forcing principals and founders to
use their personal credit cards to fund operations.
“The business is growing incredibly fast since we announced our last round,” said Dubugras. He pointed to the
launch of the eCommerce credit card in February as one example. That card has seen fast-paced growth and
counts brands Malin + Goetz, Outdoor Voices and Boxed.com as customers. Brex offers 60-day payment terms,
interest-free financing and rewards that meet the needs of that industry. Its an area that Brex said has long been
ignored by the traditional financial players. Brex underwrites the eCommerce credit card based on the business's
sales. For startups, the credit is based on their cash balance.
With life sciences, Brex will look at any funding the company has be it venture capital, university funding or
grants. “Banks have a hard time underwriting and understanding life sciences,” said Dubugras. “It's different
than a traditional startup. Some don’t have VCs.”
Brex has raised $315 million to date and in April secured $100 million of debt capital with Barclays in the form
of a warehouse line of credit. Dubugras said an initial public offering isn’t on the horizon just yet. “We started
the company a little over two years ago. We’re in no rush to go public. Now is more about raising private
capital.”
SUCCESS FACTORS/ BUSINESS MODEL ANALYSIS:
Brex focuses on emerging or early-stage companies. Here’s what sets it apart from some other cards in its
category:
There’s no personal guarantee.
A personal guarantee requires an applicant to accept personal liability for a business debt, such as on a credit card.
If the business goes belly-up, the creditor can go after the applicant’s personal assets. With the Brex Card for
Startups, there’s no founder liability if the business isn’t successful.
Personal credit scores aren’t a factor.
Brex determines the creditworthiness of a business by evaluating its cash flow, spending patterns and financial
backing, rather than the applicant’s own credit history.
You don’t need to provide a Social Security number.
The Brex Card for Startups requires a company to provide basic details, including its employer identification
number, and access to its bank information. If your application is approved, you’ll get an answer within minutes,
and you’ll be issued a virtual card that can be used right away, with a physical card to follow by mail within days.
Brex is a charge card, not a credit card.
That means the balance is due in full each billing cycle, and you can’t carry debt from one month to the next. The
upside of this is that you don’t pay interest. The downside: You can’t float debt for very long. Your account will
be automatically debited for the balance, so you’ll need to have sufficient resources on hand.
Credit limits may be higher than you can get elsewhere.
Brex’s website notes that credit limits are based on factors such as the money a business has raised and its
spending patterns. According to Tannenbaum, Brex’s method of evaluating potential cardholders allows it to offer
dynamic credit limits that rise along with a business’s cash flow. “What we don’t do is take your FICO score or
look at some other data and say your limit is $10K and either contact us if you need more, or we’ll check back in
a year and see if we can give you more,” Tannenbaum says. “That static concept is not something we do.”
It limits your ability to overspend.
Brex’s credit model updates in real time, so if a company depletes most of its cash in a given month, the credit
limit on the card will be reduced until there’s more cash in the bank account. “We monitor cash in the bank, so
we always know if a customer can pay,” Tannenbaum says. He notes that it’s rare for a company to charge a high
percentage of its net worth on a card that doesn’t allow it to carry a balance.
Brex is a unique corporate credit card with strong rewards and discounts, but it's not for everyone.
The Brex Card is a corporate card that doesn't require a credit check or any personal guarantees. It connects to
your corporate bank account, and offers a number of benefits tailored to businesses.
There are two versions of the card: the Brex Corporate Card for Startups and the Brex Corporate Card for
Ecommerce. There are a few small differences, but neither card charges an annual fee.
If Brex isn't your exclusive corporate credit card, you'll only earn 1 point per dollar on all purchases. Otherwise,
it can earn you up to 7 points per dollar depending on the spending category. So it's really only a rewarding
option if it's your company's exclusive card.
Brex allows you to transfer points to seven airline partners, including JetBlue, and for a limited time you'll earn
75,000 points upon sign-up.
The Brex Corporate Card for Startups and the Brex Corporate Card for Ecommerce have both been making the
headlines lately, and for good reason. Brex recently added the ability to transfer points to airline partners,
making its rewards much more valuable - and it just added a seventh partner, JetBlue.
As a business card with no personal guarantees and the ability to earn a ton of bonus points, it's definitely worth
considering for your business. Here's what you need to know about both versions of this unique card.
Keep in mind that we're focusing on the rewards and perks that make these credit cards great options, not things
like interest rates and late fees, which can far outweigh the value of any rewards.
When you're working to earn credit card rewards, it's important to practice financial discipline, like paying your
balances off in full each month, making payments on time, and not spending more than you can afford to pay
back. Basically, treat your credit card like a debit card.
Brex card details
Annual fee: None
Sign-up bonus: 75,000 points upon sign-up
Points earning: Up to 7x points when you make Brex your exclusive corporate card
Foreign transaction fee: None
Fees and spending limit
There's no annual fee or startup fee for the Brex cards. You'll only have to think about fees if you need more
than five employee cards. Authorized user cards over five will cost $5 per card, per month.
The Brex card is a charge card without a spending limit, which means you'll have to pay your balance in full
each month. While there's no spending limit, Brex may limit how much you can have outstanding on your card
at any time.
How to sign up
How will Brex know if it's your only corporate card, you ask? The Brex card is the only corporate card that
doesn't require a credit check, personal guarantee, or a security deposit. Instead, you'll have to link your bank
account so that Brex can know what your cash situation is like. (This also allows Brex to know whether you
have any other corporate credit cards linked to your bank account.) You'll generally need at least $100,000 in
your corporate bank account to be approved for a Brex card.
With the Brex Card for Startups and the Brex Card for Ecommerce, there isn't a long process to get approved. In
fact, you'll get approved instantly if you qualify. You can use your virtual Brex card as soon as you're approved,
and your physical card will arrive in three to five days.
Welcome bonus
From September 24 to October 31, 2019, you'll earn 75,000 bonus Brex points when you sign up for the Brex
Card for Startups or the Brex Card for Ecommerce. (Previously, the card was offering 30,000 points.)
Better yet, Brex doesn't stop at a traditional welcome bonus. It also offers welcome credits that can be redeemed
with other companies during your first year as a cardmember.
Here are some of the offers available:
Amazon Web Services - $5,000 in credit to be used over one year.
Google Ads - $150 credit.
WeWork - 15% off the list price for a six-month membership at a US location.
DocSend - three free months
Expensify - 50% discount for your first six months.

CONCLUSION:
Brex is the first corporate card for startups, tech, and online brands. It helps startups of all sizes (from recently
incorporated to later-stage companies) to instantly get a credit card that has 20x higher limits, completely
automates expense management, kills receipt tracking and magically integrates with their accounting systems.
Due to all the benefits they are providing right now, they have been valued at US$2.6 Billion company.