FinTech: Brex Dumps Thousands Of Small Business Customers In Rejig

June 21, 2022 | FinTech, News, Venture Capital

Brex will now focus on venture-backed technology startups and larger companies.

Brex, the Silicon Valley-based lender to small and medium sized businesses and startups, has announced a shift in its business priorities. It will now focus only on venture-backed technology startups and larger companies. Announced last week, the change puts tens of thousands of small businesses on notice to find an alternative provider by August 15. (CNBC)

“Brex has made the difficult decision to stop serving traditional small businesses. The needs of this market are very different from our core customer base of technology startups and larger companies. Small business customers deserve a partner who is entirely focused on their needs, and we don’t feel we can adequately serve them moving forward,” Brex said in a post.

Co-founder Henrique Dubugras explained the rationale for the pivot to CNBC. As a result of the massive turbulence in the financial markets, it had become necessary for startups and the larger Brex customers to quickly focus on profitability instead of merely growth. This group of customers therefore had more need for the company’s services such as expense control and hiring. Unfortunately, the financial crunch also equally impacted the SMBs, who also demanded more help from Brex to counter the situation.

Brex quickly found its resources were stretched.

“We got to a situation where we realized that if we didn’t choose one, we would do a poor job for both” groups of clients, Dubugras said. “So we decided to focus on our core customer that are the start-ups that are growing.”

However, Dubugras clarified that the firm did not take the step from fear of SMBs potentially defaulting on their corporate credit cards. There was no risk on this count because small businesses had to repay their cards on a daily basis.

Related Story: FinTech: Brex Acquires Pry Financials For $90M

Free Industry News

Subscribe to our free newsletter for updates and news about alternatives investments.

  • This field is for validation purposes and should be left unchanged.


Latest Alternative Investment News
FinTech: Klarna’s Valuation Plunges To $6.5B In Talks To Raise $650M (WSJ)
July 1, 2022     FinTech, Latest News, News

Klarna, the Swedish fintech known for its buy-now-pay-later (BNPL) financial product, is negotiating to raise $650 million at a valuation of $6.5 billion, which is a very sharp comedown from…
Venture Capital: OppZo, Which Funds Small Businesses Having Government Contracts, Raises $260M
July 1, 2022     News, Venture Capital

Fintech OppZo brings together investors and small businesses that need working capital loans for their government-facing businesses. Typically located in economically stressed areas of the country, these businesses represent an…
Alternative Investments/Digital: Jacobi To Launch Europe’s First Bitcoin ETF This Month

The Jacobi Bitcoin ETF, from Jacobi Asset Management, will have a number of firsts to its credit when it starts trading this month. It will be the first exchange-traded equity…
Artificial Intelligence: John Deere’s Advances in AI Powered Agriculture Machinery
July 1, 2022     Artificial Intelligence, News

John Deere (NYSE: DE) has achieved leadership in automated machinery powered by Artificial Intelligence (AI). The self-driving tractor pictured above was revealed in CES 2022 and has six pairs of…