Brex raising at $8bn valuation following banking licence application

Written by Ruby Hinchliffe
1st March 2021

Brex, the US-based corporate credit card provider tailored to start-ups, is raising new funds at a valuation of $8 billion.

The raise, set to roughly triple the San Francisco-founded start-up’s valuation, follows Brex’s application for an Industrial Loan Company (ILC) licence from the Federal Deposit Insurance Corporation (FDIC).

Brex is currently applying for the same banking licence fellow US fintech Square landed last year

According to sources speaking to The Information, Tiger Global Management, a hedge fund and venture investor are among those backing Brex’s latest undisclosed round.

It’s understood existing investors, such as Ribbit Capital, Greenoaks Capital and DST Global, are also participating in the round.

Capital raising & acquisitions

Brex launched its corporate card back in June 2018 with $57 million in funding from investors such as PayPal’s founders and Y Combinator.

The start-up went on to raise a $125 million Series C round in October 2018, at a valuation of $1.1 billion, and made its first acquisition.

By June 2019, it had raised $100 million at a $2.6 billion valuation, having raised an additional $100 million debt round just a couple of months prior with Barclays.

That same year, it made its first acquisition – blockchain-based digital payments solution, Elph Network.

Then in March 2020, it bought three more start-ups in San Francisco. These included fellow blockchain-focused firm Neji, edtech Compose Labs, and Landria, a firm producing internal knowledge databases.

Two months later, Brex landed $150 million, marking its most recent closed funding round. Just a week after this raise, the fintech slashed 62 staff members. The cutbacks highlighted the struggle many fintechs faced during the height of the COVID-19 pandemic.

“Brex Bank”

Towards the end of last month, Brex announced it was embarking on the expensive road of a banking licence application.

The start-up is seeking the same banking licence US digital payments firm Square landed just shy of a year ago. Square also applied for the licence, which allows fintechs to hold FDIC-insured deposits, in the Beehive State.

So far, Brex has partnered with the likes of UMB Financial, Bank of the West, and – most recently – Radius Bancorp. Through these firms, Brex has offered its corporate credit cards and held deposits.

Silicon Valley Bank’s former chief digital officer Bruce Wallace will head up what the fintech is calling “Brex Bank” as its CEO.

Whilst Jean Perschon, UBS’s former chief financial officer (CFO) for its US arm, will serve as Brex Bank’s CFO. And Doyle Arnold, Zions Bancorp’s ex-chief financial officer, will serve as the bank’s chairman.