FinTech: Brex, The Fintech For Startups, Applies For Banking License

February 22, 2021 | FinTech, Latest News, News

The fintech helps startups and small businesses manage their finances better.

Fintech Brex, which is backed by Kleiner Perkins Growth, YC Continuity Fund, Greenoaks Capital, Ribbit Capital, IVP, DST Global, as well as investors like Peter Thiel and Max Levchin, has filed for a bank charter. (IBS Intelligence)

Brex Bank

The startup fintech has raised over $465 million and specializes in its credit card offering for startups. Henrique Dubugras and Pedro Franceschi founded Brex in 2017. At its last funding of $150 million in May 2020, the startup reportedly achieved a valuation of around $3 billion.

The startup announced Friday that it has applied to the Federal Deposit Insurance Corporation (FDIC) and the Utah Department of Financial Institutions (UDFI) to establish an industrial bank to be located in Draper, Utah.

Brex Bank will be a wholly-owned subsidiary.

The bank has named Bruce Wallace and Jean Perschon as the proposed CEO and CFO respectively at the new entity.

Wallace has over 30 years of experience with the financial services industry, having previously served as Chief Operations Officer, Chief Digital Officer, and Head of Global Services of Silicon Valley Bank (SVB). Additionally, Wallace has worked with SMBs, a sector that is Brex’s prime focus.

Perschon has more than 25 years of experience in the banking industry including a stint as the CFO of UBS Bank USA.

The firm currently employs more than 400 people in its fintech business.

Business banking for SMBs a key focus at Brex

“Brex Bank will expand upon Brex’s existing suite of financial products and business software, offering credit solutions and FDIC insured deposit products to small and medium-sized businesses (SMBs),” the fintech said in a statement.

“Brex and Brex Bank will work in tandem to help SMBs grow to realize their full potential,” added Wallace. “We thank the FDIC and UDFI for their efforts and guidance in this process and look forward to the next steps.”

Fintechs making a beeline for banking charters

Last year, Varo Bank became the first U.S. neobank to be granted a national charter.

In October, the U.S. Office of the Comptroller of the Currency (OCC) granted conditional approval to lending and fintech company SoFi to receive a national bank charter.

UK-based challenger bank Revolut also plans to file for a charter in the U.S. later this year.

Related Story: Brex, the Credit Card Provider for Startups, Raises $150M                                

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