Capital One got a nice discount.
Capital One is paying a fair price for the customer base and infra imho to add to their business customer portfolio.
Congrats to Brex et el on their incredible journey.
If they really only raised $1.7b, per Crunchbase, then this seems to me like a very good outcome for everyone involved except its late stage investors. And, even for the late stage investors, they're breaking even.
Considering the 12bn round was back in 21, I'd expect most of the employee base to be taking a haircut on the value of their options.
It sounds like investors got out okay, but employees got fucked big time. It's a terrible exit and Brex waited too long until their growth stalled.
Maybe just pull a Bending Spoons after the acquisition, layoff most of the staff, and bring a lot of ops in-house and they'll be in profit ASAP.
Brex last raised $300M in Oct 2021 at a $12.3B valuation.
Chase got it instead, but they are losing it next month because of their shenanigans and greed
Wish crypto hadn't been co-opted by the same people and worse
(in the industry, but not at a startup)
I'm doing a consolidation / rebrand around the verdverm pseudonym this year
The new qualifications to be a Brex customer at that time were:
> Received an equity investment of any amount (accelerator, angel, VC or web3 token);
> More than $1 million a year in revenue;
> More than 50 employees;
> More than $500k in cash;
> Tech startups who are on a path to meeting the criteria above, and are referred by an existing customer or partner.
Seems like Capital One is very excited on the deal and announced it earlier while Brex hid the announcement and made it hard to find. (It's on the Brex [0] journal directory, but you cannot see it featured on its front page)
What (really) happened?
I think this is a pretty decent outcome for Brex. I read they received a total of 1.3 billion in funding, so a 5.15 billion exit isn't bad, especially since the bottom dropped out of the market for so many fintechs that were founded and had big raises between 2015 and 2021.
How much you use social media, and are a Brex customer, is going to influence how big you think that group of people is, but it's for sure, non-zero.
It's just another case of the principal/agent problem and normalized white-collar fraud in US tech.
But all employees after 2021 are underwater. I wonder if they got any relief from management or if they got screwed.
Brex killed a ton of their customer relationships to "refocus" on larger biz. That created a lot of negative sentiment for the brand.
> All Ramp did was spend more on ads and marketing
That's distribution. It matters.
Ramp has a much more synonymous name, better recognition, and less bad reputation.
> Brex is a financial technology company, not a bank. The Brex business account consists of Checking, a commercial checking account provided by Column N.A., Member FDIC, and Treasury and Vault, cash management services provided by Brex Treasury LLC, Member FINRA/SIPC.
Do you know how many businesses move money on Stripe rails? It's wild.
Every time a customer in the EU pays with Stripe, they exactly know if they are a private customer or not and in which country that customer is located in. Stripe also knows who the counterparty is ("their merchant").
Yet Stripe systematically enabled their merchants to avoid paying appropriate VAT for sales to private customers in the EU. The merchants would send you a "receipt" and then go dark, no proper invoice provided and no appropriate VAT payments to the EU made.
Their merchants could write fantasy names on the invoices, Stripe would not check or correct anything. They simply ignored the whole Mini-One-Stop-Shop in terms of VAT.
That's the "benefit" of using Stripe, they had very happy merchants who didn't need to pay taxes when selling digital products to EU customers.
I had to light a very big fire under their ass for them to provide proper invoices. I have zero indication they systematically remediated the tax fraud situation and actually paid the EU the VAT that Stripe merchants owe if you'd look into Stripe's accounting.
rishabhparikh•3h ago
billsunshine•1h ago