Brex Secures $425 Million in Series D Funding

Just weeks following Ramp’s announcement of a $115 million funding round with a $1.6 billion valuation, Brex has revealed a $425 million Series D investment, spearheaded by Tiger Global.

Largest Funding Round to Date

This new capital represents Brex’s largest fundraising effort yet. The valuation achieved is more than double the company’s previous private valuation. Crunchbase data indicates that Brex’s Series C round in mid-2020 valued the company at slightly over $3.0 billion, including $150 million in equity issued during that investment.

A Competitive Landscape

The concurrent funding rounds by Brex and Ramp highlight the dynamic nature of their market segment. Initially focused on providing corporate cards with attractive perks to expanding businesses, Brex and its competitors – including Divvy, Airbase, and others – are now developing comprehensive software suites centered around their core card offerings. These suites aim to assist companies in managing all aspects of their expenditures.

Diverging Business Models

A noticeable difference is emerging in the strategies of these companies. Leading players like Brex, Divvy, and Ramp are choosing not to charge for their software, instead relying on revenue from interchange fees. Airbase, however, adopts a different approach by charging directly for its software services.

Shift in Strategy: Introducing Brex Premium

Initial analysis suggested that the competitive landscape wouldn't necessarily lead to increased software revenue for these companies. The focus remained on accelerating customer acquisition. However, this assessment proved inaccurate. Brex has since launched Brex Premium, a new service priced at $49 per month. Further details will be provided shortly.

Significant Spend Under Management

Ramp has reported a spend-managed run rate approaching $1 billion. Given its higher valuation, Brex is likely managing an even greater volume of spending.

Rapid Customer Growth

TechCrunch inquired about Brex’s growth figures for 2020 and the first quarter of 2021. The company stated it is “onboarding thousands of new tech and non-tech customers each month.” Brex also reported an 80% increase in its “total customer” base during Q1, with monthly customer additions increasing fivefold.

Investor Confidence

This level of growth is particularly appealing to investors in later funding stages. TechCrunch is scheduled to speak with Brex CEO Henrique Dubugras and will provide further updates following that conversation.