Brex ventures into debt financing

Cash flow management has become another critical point of businesses post Covid-19 pandemic and in competition with regulated banks, commercial payments fintechs are stepping in to grab a share of this sector too.

This week, US-based B2B payments company Brex has announced that it is launching Brex Venture Debt which is a product offered by the company to its clients to access non-bank debt financing.

“Our venture debt solution was created with scale in mind, so that we can help founders take their business to the next level while minimizing dilution,” said Henrique Dubugras, co-founder and CEO of Brex.

This month, Brex acquired Weav for $50 million and previously the company raised $425 million in the funding round and has also launched a financial solution for businesses.

The company provides its clients with products and services such as credit cards, cash management accounts, spend management, and bill pay software dashboard. Brex already competes with banks offering a deposit-type product called Brex Cash that invests customer funds in money market funds that are not insured by the US Federal Deposit Insurance Corporation.

With this new venture into debt financing, the company in its press note said that it differs from traditional bank offerings by ‘providing customers with longer terms and a faster diligence process’.

This option will be available to certain customers with ‘scalable, recurring revenue in high growth sectors including software-as-a-service, consumer, and fintech’. The company touts this as an ‘all-in-one finance solution for growing businesses’.

Brex started back in 2018 by integrating software, services, and products into one platform for its clients. It operates a subsidiary, Brex Treasury LLC that is registered as a broker dealer with self-regulatory organisation FINRA.