Brex lands $150m to continue small acquisition spree
Brex, the US-based corporate card provider tailored to start-ups, has landed $150 million in a Series C extension from investors including DST Global and Lone Pine Capital. It’s the fintech’s largest single raise to date.
With $732.1 million raised in total according to Crunchbase, the fintech plans to use its newest capital to continue boosting its engineering, product, and design capabilities.
Recently, the fintech has done this by acquiring small start-ups to add “meaningful engineering and product talent” to its ranks.
At the end of March, Brex acquired Neji – a start-up focused on blockchain and networking technologies, Compose Labs – a company which operates video experiences and educational platforms, and Landria – a firm producing internal knowledge databases.
Brex plans to continue its acquisition spree on small start-ups as a way of hiring and meeting product goals, but for now the $150 million will make up “general purpose cash” for its balance sheet.
Read more: Brex acquires trio of San Francisco start-ups
“I’m glad this round came together, but if it hadn’t, we would’ve been fine,” Brex’s co-founder and co-CEO Henrique Dubugras told TechCrunch. “The capital is so we can play offensive while everyone else plays defensive.”
Despite many businesses being forced to lay off staff and reduce employee spend, Dubugras says he built Brex for start-ups which have a high risk for failure anyway.
The company has cut some customers’ credit limits to mitigate the exposure risk during the crisis, and has reduced its spend on travel and restaurants to “almost zero” since COVID-19.
“Us lowering credit limits has been happening since the existence of Brex,” says Dubugras. “It’s not something that is new to COVID.”
The co-CEO says “going to any new verticals or any kind of growth projects are not necessarily priorities for the year”. “Most of the funds will go toward building the product; the investment in growth is probably done post COVID-19,” he adds.
Read next: Brex raises $100m to reach $2.6bn valuation