Inside Brex's efforts to burn less cash | Tech Crunch

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Welcome to TechCrunch Fintech (formerly Interchange)! In this edition, I'll be looking at Brex's latest round of layoffs, the state of fintech investing in 2023, and more! I may be taking some time off in the coming weeks, but never fear, TechCrunch Fintech isn't going away. We will be back soon!

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Big story

What goes up must come down. For expense management startup Brax, this happened in relation to its employee count. Despite low interest rates, the company saw a bump in business and VC money came in easily. Its headcount was around 1,300 before it was laid off in October 2022. As things hit the ground running, Brex is trying to reset, announcing this week that it will cut 282 employees, or about 20% of its staff, in a restructuring. . The move follows reports that the company burned through $17 million in cash each month in the fourth quarter and is trying to preserve runway.

Analysis of the week

Fintech, oh, fintech. Last year was not easy for you. According to Pitchbook data, fintech investors injected $34.6 billion into startups in 2,055 deals in 2023, a drop of –43.8% and –32.4% YoY, respectively. Valuations also fell more, with a median of $19.4 million, down –13% from the 2022 median. Exits also took a dive, with just $5.9 billion in exit value generated across 185 deals in 2023, down –76.1% and –22.3% YOY, respectively. But Q4 is fine. According to CB Insights, fintech saw eight new unicorns during the period and equity funding grew by a double-digit percentage.

dollars and cents

Built Rewards, whose platform aims to allow users to earn rewards on rent and everyday neighborhood spending, announced last week that it had raised $200 million at a $3.1 billion valuation. General Catalyst led the financing, which doubled the New York-based company's valuation from its $150 million October 2022 raise. The raise and valuation jump is impressive in an environment where mega-rounds (deals worth more than $100 million) are few and far between. CB Insights State of Venture Report 2023 found that mega rounds “will be a hallmark of 2021, with 350+ occurring each quarter . . . In Q4'23, that number fell to just 78 – the lowest level since 2017.

What else are we writing?

Swedish fintech company Klarna has announced its first subscription plan, “Klarna Plus” for $7.99 per month, with benefits such as no additional service fees, double reward points and access to exclusive discounts with leading brands when using Klarna's one-time card.

A new list compiled by GGV US highlights 50 fintech startups that venture capitalists think are hot stuff. We also spoke to GGV Managing Partner Hans Tung about what he sees in the sector today.

PayPal will begin piloting some new updates to its service, some of which will impact AI-powered personalization. The company is introducing a new “CashPass” cash-back offering called “Smart Receipts” with personalized recommendations, among other things.

Other high-interest headlines

Rainbow has raised $12 million

The sequence raised $5.5M in funding

Sunbit secures US$310m debt warehouse facility led by City

Investing platform launches public options trading—and pays customers for their orders

Colombian fintech company Finji has been acquired by Girasol Payment Solutions.

BillingPlatform secures $90m growth equity investment from FTV Capital

Fintech predictions from Plaid's CEO

Follow me on X @bayaria writer For the latest fintech news, posts about coffee and more.

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