The founders of Brex are Pedro Franceschi and Henrique Dubugras.
Brex
The first capital said Thursday get Brex Payments was made by the start-up for $5.15 billion, the latest deal brokered by the bank’s CEO, Richard Fairbank.
The firm disclosed the deal in its fourth quarter earnings statementsaid the deal was 50% cash and 50% stock. It was Brex previously assessed $12.3 billion.
Bank shares fell by about 3%.
Under the leadership of Fairbank, the rare founder-CEO of the largest US bank Capital One was purchased rival card firm Discover Financial made about $35 billion last year. The deal was Fairbank’s crowning achievement, giving the credit card lender access to one of the only payment lines of any size.
“Since our inception, we’ve been building a payments company at the frontier of a technology revolution,” Fairbank said. release. “The acquisition of Brex accelerates this journey, particularly in the business payments market.”
Fairbanks said Brex is a pioneer in integrating corporate card, banking and expense management software: “They’ve made the rarest of journeys for fintech, building a vertically integrated platform from the bottom of the technology stack.”
However, Brex’s more than 50% drop from 2023 levels highlights the challenges faced by even successful fintech companies.
Belongs to the Brex class fintech firms rose to popularity during a period of low interest rates; it was originally known as a startup that lends to other startups through its cards.
But the company has expanded into other sectors beyond technology and now serves large firms and startups, including Robinhood, Scaling and Anthropic.
Capital One, which has been offering business credit cards for decades, has become increasingly convinced that the Brex model is a viable proposition, according to a person familiar with the lender’s strategy.
“We didn’t need to continue this acquisition, our growth was incredibly strong,” Brex CEO Pedro Franceschi told CNBC.
Combining Brex’s technology with Capital One’s reach and resources will allow the startup to scale faster than a stand-alone firm, he said.