Brex, which has started serving start-ups, now says it is “less suited to meet the needs of smaller customers” – TechCrunch

Three months after its announcement will make a big push in software and enterprise, fintech giant Brex is clearly abandoning the very segment it began to serve – small and medium to large enterprises.

Startup customers say they have been notified that they will be loaded from the platform on August 15. Brex published briefly explanation on its website, saying it is constantly evolving its business and as it does so, it has become “less suited to meeting the needs of smaller customers.”

In this message, Brex told its SME customers that their accounts will remain active until August 15, giving them time to move their money to an external bank account “or other alternative platform” and make transactions with their Brex card. . The company provided the same deadline to supplement a possible deficit on their account.

The company concludes by simply saying, “We value your business and wish you all the best in the future.”

For strangers, Brex is one of many companies in the corporate cost management space that has become increasingly crowded – and competitive – in recent years.

Brex was originally a startup focused on startups. In particular, it provides corporate cards aimed primarily at start-ups and small and medium-sized enterprises. Brex is gradually developing its model in order to serve as a “financial operating system” for companies. Historically, it has generated its revenues from exchange fees.

But earlier this year, the company announced it was makes a “big boost” in the software, which means that revenue generation will be more diversified, as it will now earn money from recurring subscription revenues for its software, in addition to exchange fees. Brex also places more emphasis on moving to a higher market to serve larger customers,

His move to stop serving SMEs is shocking to say the least, and one can only assume that as market conditions have changed, he no longer wants to take the risk of serving less money-rich customers as a way to limit your own credit risk. Talk about a friend in good weather.

Earlier this year, Brex confirmed an increase of $ 300 million which cost him a staggering $ 12.3 billion. As of March, the company had about 1,100 employees, a 100% increase in revenue on an annual basis in 2021 and a customer base of “up to 50,000”, according to CEO Enrique Dubugras. He declined to give hard earnings figures, but said earlier that TechCrunch Brex was still focused on growth and was not yet making money.

The company also told TechCrunch in March that most of Brex’s revenue still comes from interchange fees, but expects the share of SaaS revenue and “other revenue lines” to grow over time.

TechCrunch has contacted Brex for comment and will update this story if and when it returns to us. More to come in the form of a reaction from the industry later today.

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