FinTech: Brex, Which Raised $150M Last Month, Lays Off 14% Of Workers

June 1, 2020 | FinTech, News
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Brex, a B2B credit card provider and fintech, plans to restructure its operations.

In a blog post on Friday, Brex co-founders Henrique Dubugras and Pedro Franceschi announced the company was laying-off 62 workers. They attributed the decision to a re-orientation of the company’s products required due to the impact of COVID-19 on its customers. (Bizjournals/San Francisco Business Times)

The pink slips come after the company set new priorities

“Three months in, it’s clear that the impact of COVID-19 won’t be short-lived,” wrote the founders. “We know that the pace of growth won’t be what we expected for the foreseeable future.”

They said the company needed to “prioritize building over growing over the next year,” and “revisit investments that no longer make sense in the new reality.” Accordingly, “some teams will, unfortunately, need to be reduced.”

Shortlived “offensive play?”

The job cuts unfortunately follow on the heels of a capital raise and three acquisitions, such is the power of COVID.

Brex announced its raise of $150 million from Lone Pine Capital and a group of existing investors led by DST Global on May 19.

“I’m glad this round came together, but if it hadn’t, we would’ve been fine,” Dubugras said to TechCrunch at the time of the raise. “The capital is so we can play offensive while everyone else plays defensive.”

On March 24, TechCrunch reported that Brex acquired three companies across the sectors of security, e-commerce, and customer support. 12 new people joined Brex from the companies – Neji, Compose Labs, and Landria. The cost of the acquisitions was not disclosed.

Brex raised $200 million in debt financing in December.

Brex has garnered $465 million in funding since its founding in 2017.

Bay Area lay-offs

The San Francisco Business Times said that 120 startups across the Bay Area have let go of more than 12,000 employees since mid-March, quoting data from Layoffs.fyi.

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

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