Reports published late last month indicated Brex, the fast-growing fintech startup, was raising yet another round. Today, the San Francisco-based company is confirming it’s closed on $100 million in Series C-2 funding at a valuation of $2.6 billion.
Kleiner Perkins has lead the round via former general partner Mood Rowghani, who left the fund last year to form Bond alongside Mary Meeker and Noah Knauf. Existing investors DST Global, IVP, Y Combinator and Greenoaks Capital have also participated in the round.
The Y Combinator graduate, which provides corporate cards tailored for startups, is also announcing the launch of its third product: a card made specifically for life sciences companies. With a focus on pharmaceutical, biotech and cosmetic businesses, Brex has customized its underwriting model for the life sciences sector and crafted targeted rewards, including cash back on lab supplies and conference fees.
Brex’s funding history
March 2017: Brex graduates Y Combinator
April 2017: $6.5M Series A | $25M valuation
April 2018: $50M Series B | $220M valuation
October 2018: $125M Series C | $1.1B valuation
June 2019: $100M Series C-2 | $2.6B valuation
Brex’s valuation has grown significantly from $1.1 billion just eight months ago. Why? Brex co-founder and chief executive officer Henrique Dubugras cites an expanded total addressable market (TAM).
“When we raised our last round, Brex was doing well within the startup market … but there was still a question from investors of whether Brex could expand outside of startups into a broader market,” Dubugras tells TechCrunch. “[Ecommerce] did really well really quickly … What that meant for investors is that Brex could not only win at startups but we could also win at other types of businesses that are more traditional.”
In February, Brex released its second product, the credit cards made specifically for ecommerce companies referenced above. The card, which “enables online brands and retailers to bypass the problems of legacy banking systems,” has been a huge success for Brex, Dubugras said. In just a few months time, it’s multiplied Brex’s TAM and become responsible for one-third of the business’s revenue.
Since its last fundraise, Brex has also launched a rewards program for customers and closed its first notable acquisition.
Like many startups raising capital today, Brex wasn’t in need of the cash. Dubugras notes the Series C-2 was more of a “repricing event” than a necessary fundraise.
“We haven’t touched our money from the Series C yet,” he said. “For us, this round is a repricing event for the company that helps with recruiting.”
“The money will be set aside for risk management purposes in the sense that our banks — our partners — like us to have a lot of equity sitting there in case something goes wrong,” Dubugras added. “An important part of fintech is always being well-capitalized in case something goes wrong.”
Brex valued at $2.6B with new cash from Kleiner Perkins