2. Brex

Founders: Henrique Dubugras, Pedro Franceschi (co-CEOs)
Launched: 2017
Headquarters: Remote-first
Funding: $1.2 billion
Valuation: $12.3 billion
Key technologies: Cloud computing, machine learning
Industry: Fintech
Previous appearances on Disruptor 50 List: 2 (No. 2 in 2022)

Fintech startup Brex was already a high flier, growing by 200% last year with more than 200,000 customers from startups to enterprises. Providing a way for fast-growing innovators to access credit, it has been known as an edgy competitor to 40-year-old Silicon Valley Bank. Now following the collapse of SVB, Brex has gained billions of dollars in deposits from thousands of ex-SVB clients.

It was a scenario that Brazilian-born co-founders and Stanford drop-outs Henrique Dubugras and Pedro Franceschi probably never imagined when they launched Brex in San Francisco in 2017 as an alternative to business credit cards. With previous experience in founding Pagar.me, one of Brazil's largest payment processors, their idea for Brex was to combine financial products and software in a single platform. The founders conceived Brex in a Y Combinator accelerator program after growing frustrated applying for a credit card to launch and fund their original idea for a VR startup.    

Brex aimed to solve a pain point for founders who needed credit to cover startup expenses, manage cash and track expenses, all presented in a single platform that also spans to venture debt. What has differentiated Brex from the status quo in corporate cards is its focus on fast-growing businesses. The fintech startup offers higher limits, reward options including coaching and masterclasses tailored to founders, and advanced spend management software that adjusts credit limits based on cash balances and revenue.  

While Stripe, No. 28 on this year's Disruptor 50 list, transformed the collection of customer payments online, Brex has tapped a market opportunity in the business-to-business space. Unlike the business-to-consumer market, credit card penetration is low in B2B. Checks rather than credit cards have remained the most popular payment channel in B2B transactions, while card adoption has remained about 4%, partly because of business challenges in access, onboarding and limited utility. The product-market fit for Brex led to 20,000 customers in less than three years.   

Having raised a total $1.2 billion in venture capital including $300 million in early 2022 at a $12.3 billion valuation in a dash for growth over profitability, financial efficiency to reach profitability is the new focus. Brex reduced its headcount by 11% in October 2022.

Originally, the majority of Brex revenue generation was coming from interchange fees on transactions processed with its Brex corporate credit. In a strategic shift, last June Brex stopped servicing smaller businesses without venture capital and began focusing on software, subscriptions, and serving mid-market and enterprise customers. Meanwhile, well-funded fintech startup Ramp is chasing Brex with similar products for the small business market.

To tap the larger enterprise market, last year Brex Empower was launched as a financial software platform and spend management product. Additionally, Brex paid $90 million to acquire Pry Financials, a 10-person software platform with tools for budgeting, bookkeeping and forecasting. Brex also went global, serving U.S.-based companies in more than 100 countries. 

In other moves last year, Brex partnered with startup accelerator Techstars to get early access to its high-potential emerging businesses. Brex also launched Catharsis in partnership with digital healthcare provider Spring Health, No. 16 on this year's Disruptor 50 list, to support startup founders' mental health.