Capital One has agreed to acquire fintech startup Brex for $5.15 billion in a mix of cash and stock a deal that comes at less than half of Brex’s peak private valuation of $12.3 billion set in 2022. While the markdown has sparked quiet satisfaction among some Silicon Valley observers, the transaction still delivers outsized returns for Brex’s earliest backers.
Founded in 2017 by Brazilian entrepreneurs Pedro Franceschi and Henrique Dubugras, Brex rose quickly as a corporate card and spend-management platform catering to startups and fast-growing companies. Capital One confirmed the acquisition shortly after reports surfaced, positioning the deal as a strategic expansion of its technology capabilities and global reach.
Early Bets Pay Off Despite Valuation Haircut
For early investors, the sale represents a major win. Ribbit Capital, which led Brex’s $7 million Series A shortly after its founding, is believed to have generated returns estimated in the hundreds of times its initial investment, even after dilution. Other early supporters included Y Combinator, Kleiner Perkins, DST Global, and prominent angel investors.
Those gains stand in contrast to the experience of later-stage investors, many of whom backed Brex at valuations above $7 billion. While they may not see the returns they once anticipated, the deal still provides liquidity at a time when exits remain scarce across the venture market.
Strategic Timing for Capital One
The acquisition comes at a pivotal moment for both companies. Just months ago, Brex secured a license allowing it to operate across the European Union, enabling it to issue cards and offer spend-management services directly in all 30 EU countries. That approval gives Capital One immediate access to European corporate banking customers, alongside Brex’s technology platform and high-profile client base, reportedly including companies such as TikTok, Robinhood, and Intel.
Brex also oversees an estimated $13 billion in customer deposits held at partner banks and money-market funds, an asset that likely added to the deal’s appeal.
Brex’s journey has not been without controversy. The company faced criticism in 2022 after it moved away from small and medium-sized businesses to focus on venture-backed and enterprise clients, a shift that alienated many early users but ultimately helped stabilize its finances.
Under the agreement, Dubugras, who stepped back from daily operations in 2024, will remain board chairman, while Franceschi will continue as CEO after the acquisition. Capital One expects to close the deal in the second quarter, marking one of the most notable fintech acquisitions of the year.
