Brex raises $100 million at $2.6 billion valuation for startup-friendly credit card

By Paul Sawers

It has been a whirlwind 12 months for fledgling fintech startup Brex, which launched last June with $57 million in funding from some big-name investors, including PayPal’s founders and Y Combinator. Brex, which has created a corporate credit card for startups and scale-ups, raised another $125 million series C round in October, at a valuation of $1.1 billion, and made its first acquisition (a blockchain startup, no less). It also raised an additional $100 million debt round a couple of months back.

Today, Brex has announced another $100 million in funding in a series C extension round led by Kleiner Perkins Digital Growth Fund, with participation from existing investors, including  Y Combinator Continuity, GreenOaks Capital, IVP, Ribbit Capital, and DST Global. This takes Brex’s total equity funding to $315 million, with a valuation of $2.6 billion — a considerable growth trajectory for a company founded in 2017 that has been widely available for less than a year.

Brex it

By way of a quick recap, Brex launched as a corporate credit card for startups, which typically find it more difficult to gain access to lines of credit from traditional lenders. Brex effectively serves as an underwriter and sets credit limits based not on credit history, but on factors such as who has invested in the startup and the equity they hold and the startup’s cash balance and spending patterns. Startups don’t pay any fees for the first five cards, after which they pay $5 per month for each card — of course, Brex also makes money from transaction fees similar to other credit cards.

Brex offers a number of other useful features, such as the ability to capture receipts with a smartphone camera and match them to a statement, and it directly integrates with accounting tools, including QuickBook, Expensify, and Xero.

Brex was cofounded by Brazilians Henrique Dubugras and Pedro Franceschi, known as the teenage creators behind online payments processor Pagar.me, which they sold for an undisclosed sum in 2016. Fast-forward to March, 2017, when Brex was born, this time in Silicon Valley and with a vast target market spanning the entire U.S.

After graduating from Y Combinator, Brex went on to accumulate around 1,000 customers during its private launch, including Affirm, Algolia, Flexport, and Y Combinator itself. Though Brex’s initial offering was aimed at startups, it has expanded its focus to larger tech companies and specific verticals such as ecommerce.

With another $100 million in the bank, Brex will invest in specific spend-management features, its rewards program that launched back in October, and efforts to target new customers.

“At Brex, we build corporate payment technology to accelerate entrepreneurs and scaling companies,” said Dubugras, who serves as co-CEO. “We recognize that each business is unique and therefore tailor our product to meet their specific circumstances. With this new funding, we can deliver relevant and unique financial products to an increasingly broad customer base.”

Source. VentureBeat, Paul Sawers, June 11, 2019

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Nextdoor Raises $123M At $2.1B Valuation To Grow Globally

By Mary Ann Azevedo

Nextdoor, a popular social network for neighbors, announced today that it has raised a $123 million Series F led by Riverwood Capital.

Founded in 2010, Nextdoor aims to connect people who live in the same, or nearby, neighborhoods together by creating a forum for them to communicate digitally. Its presence has grown over time (I’ve personally used it for years!) and currently, people in over 236,000 neighborhoods are using the platform.

Existing backers Benchmark, Tiger Global Management and Kleiner Perkins also put money in this latest round, which also included “new participation” from an unnamed large global asset manager. The financing brings San Francisco-based Nextdoor’s total raised to $408.2 million since its inception, according to its Crunchbase profile.

Its valuation increases to over $2 billion with the funding, the company confirms. When I asked about growth metrics, a spokeswoman only said that Nextdoor expects “revenue to double again in 2019.” The company makes money from a combination of sponsored posts as well as a real estate vertical that allows agents to brand themselves as local experts in the neighborhood.

In its press release, Nextdoor said it’s planning to use its new capital toward growing internationally, having just launched in Sweden and Denmark. The company also wants to expand its existing footprint in the United States, United Kingdom, Germany, France, the Netherlands, Italy, Spain and Australia. It said it plans to grow “three times faster across Europe” in 2019 than it did last year.

CEO Sarah Friar in a blog said Nextdoor will also be focusing on local businesses in 2019.

“When they thrive, communities thrive, and there is so much we are uniquely positioned to do for them,” she wrote. “Helping build their reputation, attract new customers, and improve customer loyalty will ultimately drive more sales to the local businesses that are core to our communities.”

As part of the latest round, Chris Varelas, co-founder and managing partner of Riverwood Capital, will join Nextdoor’s board. In the press release, Varelas said Riverwood believes Nextdoor “represents the future of local community and commerce.”

“This investment reflects our collective belief in the power and opportunity in this space, and the Nextdoor team,” he added.

Source. By Mary Ann Azevedo, Crunchbase, May 14, 2019

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This post was brought to you by Woewoda Communications, your partner in the Canadian private equity and startup markets; offering strategic communications, public relations & investor relation services to Canadian VCs, PEs, Angels, Endowments/Trusts, Family Offices, and Canadian startups involved in ICT, IoT, blockchain, life sciences, healthcare, agribusiness, clean energy, fintech, AI and robotics.

Are you a Canadian GP/LP/CI or a Canadian startup that needs to grow or scale? Give us a Call! One of our representatives would love to explain how we vertically design, and then systematically layer each of our communication platforms to effectively reach niche target audiences for our clients. WC offers a unique synergistic approach to effectively communicate our client's message to their target audience.

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