Capital One Financial has agreed to acquire Brex, a financial technology company focused on corporate expense management and accounting, for $5.15 billion. The startup was founded in 2017 in Silicon Valley by Brazilians Pedro Franceschi and Henrique Dubugras, and at one point had considered going public through an IPO.
Capital One plans to pay for the acquisition with approximately 50% in cash and 50% in stock. This marks the company’s largest transaction since last year’s $35 billion purchase of Discover Financial Services, a deal that created the largest U.S. credit card issuer.
Brex was launched to serve startups that had trouble obtaining corporate cards from traditional providers such as American Express, which tended to favor more established companies. According to Dow Jones, Brex clients include TikTok, Robinhood, and Intel.
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The fintech developed an integrated financial management system offering services for cash management, expense control, and payment automation.
Its backers include major venture capital firms such as Tiger Global Management, Lone Pine Capital, Greenoaks Capital, and Technology Crossover Ventures.
In 2023, Brex received a large volume of deposits from tech companies that had withdrawn funds from Silicon Valley Bank following its collapse. Higher interest rates and weaker demand post-pandemic created a tougher operating environment for Brex and other startups in the sector.
That same year, CNBC ranked Brex as the world’s second most disruptive company on its Disruptor 50 list, behind only OpenAI, the maker of ChatGPT.
Franceschi met Dubugras when they were both 16, through online forums. The two became friends and went on to launch the payments fintech Pagar.me, which was later sold to Stone. They founded Brex after dropping out of Stanford University before completing their first year.
Dubugras became widely known in Brazil in 2023 after sparking controversy by restricting access to Fernando de Noronha for his wedding celebration.
With international news agencies.
