The Ledger
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Franceschi: Private fundraising valuations differ fundamentally from 100% full-liquidity acquisitions
“When someone fundraises a private company, you're selling one, two percent of the company, right? When you're selling, when you're doing a transaction like this one, you're selling 100% of the company. So there's a very big difference between putting in a hund…”
Levy: Tech is entering a golden age of M&A
“So look, I said this a few months ago, I think we're entering the golden age, a golden age of M and A right now. I think there's a bunch of factors that are melding together to make it a point in time where the consolidators are getting bigger. They're taking …”
Brex will surpass Concur's $1.5B revenue mark through interchange monetization
“If Brex continues on our current run rate, like we're going to eclipse that much, much faster by winning their customers, but monetizing through the interchange, not through generic software revenue.”
Brex is the only next-gen card company owning its financial infrastructure
“The way that we differentiate against our competitors is the fact that we're the only next gen Category-defining company that owns our own financial infrastructure. Vertically integrated, so to speak. And what that means is getting super technical is that we d…”
Financial rails let Brex monetize 20x better than software like Expensify
“We believe that we monetize 20 times better Then other spend management systems, systems like Expensify or Concur, because we monetize through financial services.”
Franceschi: Incumbent ERP companies will not build autonomous AI agents
“You have existing incumbents in the finance space, like the ERP companies, for example, I don't think they're going to go do that.”
Capital One acquired Brex at a 13.4x forward gross profit multiple
“And Adyen trades at just below 14 times gross profit. This deal is at 13.4. So, so when you just compare to where all the multiples exist in the range of outcomes of being a public company, this is the very, very top of the range.”
Franceschi: Brex's acquisition by Capital One is the largest bank-fintech deal ever
“Here's a crystallized outcome, which is the biggest deal of this size that ever happened in history, and the scale of a bank and a fintech company.”
Franceschi: Brex serves 300 public companies and all major AI labs
“We went from, you know, zero to 300 public companies on Brex and, you know, all the major AI labs are on Brex today.”
Franceschi: Brex is growing 40% to 50% and borderline cash-flow positive
“You look at where the company is today, you know, the company is growing, you know, 40 to 50%. You know, borderline cashflow positive.”
Franceschi: Brex will be third-largest US corporate card on day one
“And then you look on this on day one after closing, Brexit will be the third largest corporate card in the country.”
Franceschi: Brex serves one in three US startups
“And Brex today serves one in three startups in the US.”
Franceschi: Brex repriced equity from $12B to $4B, converting RSUs to options
“Before we were issuing RSUs to twelve billion in 21, and then in 23 we actually said, let's reprice the equity at four. And we did something that's pretty unusual. We switched from RCUs into options and the strike price was low on those options.”
AI benefits will accrue mostly to fast-moving larger companies
“I think that in a world of AI and as AI starts to mature, I think a lot of the benefits actually go to what I would call not the incumbents, but like the fast moving larger companies. Like, of course there will be a few companies that start from zero and explo…”
Mature Brex cohorts spend 60% more than they did on Amex
“For mature cohorts, Customers are spending 60% more on their Brex cards than they were on Amex in the last month that they were on Amex.”
Majority of Brex revenue comes from interchange fees despite multiple products
“And so when you think about Brex and what we're doing, the majority of our revenue is through interchange, even though we have a number of other product lines.”
Franceschi: Capital One deal accelerates Brex's AI roadmap by 2-3 years
“We're accelerating our AI roadmap by two to three years compared to what we would do as a standalone company.”
Franceschi: Most scaled companies fail to reaccelerate growth due to scar tissue
“Reaccelerating growth is really hard. Most companies can't do it. It's just really hard to reignite the thing that made you great. Because you're much bigger, there's much more scale, there's scar tissue everywhere.”
Franceschi: Brex and Ramp hold just ~3% of US corporate card market
“Braxton Ram combined probably have three percent of the U S markets.”
Franceschi: Capital One's acquisition of Brex took just over 40 days
“The whole thing from first sort of serious meeting to sign definitive agreement was a little bit over 40 days.”
Capital One filings allocate $950M for Brex integration and retention
“The public filings from Capital One, you know, there's nine hundred and fifty million dollars of integration costs and retention and all that.”
DoorDash spends many multiples more on Brex than it did on Amex
“DoorDash, one of our beachhead customers, they've been on Brex for now three years. They're spending many multiples more on Brex than they were on their American Express.”
Successful business partnerships require companies of similar size and alignment
“You need to partner with folks that are similar to you in order for it to be successful. It can't be one really large company and one really small one or one that serves companies in one space and one in the other, because then again, it's like, what's in it f…”
Brex has multiple business lines each generating over $100M in revenue
“We now are a multi-product company in the sense of we have more than two business lines at over a hundred million in revenue.”
Brex's enterprise business is growing over 100% with 130% net revenue retention
“So I'm very proud that our enterprise business is growing over a hundred percent and our NRR in the segment is over a 130%.”
Brex has surpassed $100 billion in total payment volume
“Most recently, you guys crossed over a hundred billion in total payment volume.”
Only 22% of spend on Brex is travel and entertainment
“When you look at the spend on Brex, actually only 22% of it is what we call T and E spend.”
Business development and partnerships should operate like a venture capital portfolio
“BD and product partnerships should be the VC arm of a company. And this is what I tell my team is like, look, we need to look for pole vault opportunities, but we're going to fail sometimes like, yeah, Navon zip are going great, but there's a bunch of other pa…”
Zip and Navan could become Brex's equivalent of Shopify
“Zip and Navon, I think are both examples of potential Shopify's because they're both growing extremely quickly. We're growing extremely quickly. Everyone grows together.”
Founders exploring M&A should keep talks completely secret from their team
“The number one advice I give founders on when they're testing the waters on M and A is to not tell anyone at their company. Because as soon as you get folks excited, it's a little bit like raising around, but at an extreme, as soon as people at the company, ev…”
Franceschi: Brex was never for sale before Capital One initiated talks
“The company was never for sale, right? So they approached us and said, we want to take a look right now.”
Brex ran Capital One due diligence with 15 to 20 internal leaders
“So we had very few people. We had probably 15, 20 people in total at the end. And, but the majority of it was just a leadership team.”
Brex and Navan had 2,000 mutual customers before launching their partnership
“Navon, literally the president over there, Michael, he's become a good friend of mine, came to us a year and a half ago, and we had like 2000 mutual customers”
Sixty percent of Brex customers are non-digitally native businesses
“So one stat that we're super proud of is now, 60% of our companies are outside of what we call like digitally native companies, which I think is a big accomplishment given how, how old we are.”
Brex has raised about $1.5 billion in total primary funding
“So we've raised about 1.5 billion in total.”
Brex is actively developing its own stablecoin strategy
“And obviously Brex as a card issuer and spend management platform, we need to take note of that. And we need to be thinking about our own stable coin strategy as we monitor what folks are doing.”
Levy: Brex partnered with First Republic in 2018 against SVB
“We just signed a partnership with First Republic Bank. And I said, okay, interesting, but aren't you guys like a, Year old startup. And he's like, yeah, they want to compete more with Silicon Valley bank, who has an all in one suite of banking and corporate ca…”