Capital One to acquire Brex for $5.15B

Brex literally came to us one day in 2022, and notified us that "We have 6 weeks to move everything off their service" they told us boldly they are refocusing on the enterprise market and we were only a "SMB". The guy who literally told us this framed it as a good thing for us like it was some sort of weird break up.

At the time we had signed a large enterprise agreement not long before that, and we even were advertised as a enterprise customer testimonial. When we mentioned that he said it was final. They ghosted us apparently and from what i heard a bunch of companies were the same somehow no longer acceptable for their services. I had a friend who worked for a very large F500 company who also got a similar treatment.

Ironically i had a friend a tiny crypto startup that somehow was allowed to stay despite not meeting their requirements.

Brex rejected my application to open a bank account in 3 different occasion. mercury.com provided me the B2B account within the day and the product and UX is awesome.

So, they got Greenlight, Discover, and now - Brex. They are turning into a financial powerhouse.

Feels like they were first in the space but then somehow Ramp ran away from dev with a higher dev pace. Fascinating to see.

Wow why did it go for so much less than the last valuation? Is the overall market turning bad or is it just a Brex thing?

Sold for $5.15B.

Brex last raised $300M in Oct 2021 at a $12.3B valuation.

Tough outcome for many involved given peak valuation @ 12B

I guess it's not a bad Brexit.

Capitalone is going to need something to make up for switching all their debit cards from MasterCard to Discover

Ramp valued at $32B is a joke. Hopefully this sets a realistic benchmark for valuation. All Ramp did was spend more on ads and marketing. And CEO is now claiming their "AI Agents" are going to do something meaningful.

Brex's CTO recently came on LS to talk about their AI strategy and tech: https://latent.space/p/brex

Why are people saying this seems like a bad deal?

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.

Feels like a great outcome for Brex. Mercury and Ramp seem to have been chipping away at their leadership position in recent years, so I wonder how their growth trajectory changed over that period.

That's less than half of Brex's crazy $12.3 billion peak back in 2022.

But honestly, it’s still one of the biggest fintech deals ever and actually gives people real money in a market where most unicorns are just stuck. The founders are reportedly splitting about $1 billion each, early investors (2017-2018) are getting 12-80x returns, and YC’s tiny $120k seed turned into ~$100 million (800x, insane TBH). Even later folks (especially the 2021-2022 crowd) are breaking even (at least) or getting a little upside thanks to some 2024 RSU top-ups.

The investors all have liquidity preferences so the ones that invested at higher valuations didn't lose any money.

But all employees after 2021 are underwater. I wonder if they got any relief from management or if they got screwed.

Conditional anti-trust approval reflecting NXP unsolicited bid.

https://web.archive.org/web/20190827190311/https://www.wsj.c...

Fintech trading poorly. Also Brex didn't successfully make the AI pivot like their competitors at Ramp

Should they have continued growing for a while before selling or was now the best ever time?

This looks like a bad deal for Brex as they were valued at 12 billion.

Capital One got a nice discount.

Years ago I took a chance on hiring an engineer fresh out of a software bootcamp. Turned out to be one of the best engineers I have ever worked with - so much tenacity and thirst for learning new things. They went on to join Brex when the company was just starting out. What an awesome exit!

https://www.ycombinator.com/companies/brex

https://www.clay.com/dossier/brex-funding

https://www.brex.com/

Does this mean Stripe is worth $1B?

Capital One are scumbags. I'm glad they are dying and spending their money on dying companies at the same time. Less than half valuation, lol.

More consolidation. What the end user needs.

so are the founders and employees fucked? wasn't this company valued at like 12b?

They refused my business because I didn't have SV VC money

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

Alternative to archive.md:

https://www.msn.com/en-gb/money/other/capital-one-strikes-5-...

Text-only:

https://assets.msn.com/content/view/v2/Detail/en-in/AA1ULTnJ...

Brex post: https://www.brex.com/journal/brex-and-capital-one-join-force...

Pretty steep haircut from their $12b peak in 2022. And that's before you factor in their revenue that's grown 2.5* from ~$312M in 2022. If their figures are to be believed, Capital one is getting an asset growing 50% YoY, for just 7* revenues.

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.

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