Just two years after it was founded, Brex Inc. is close to securing new funding at a valuation north of $2 billion, according to people familiar with the matter.
The San Francisco-based startup — whose main business is providing corporate credit cards to tech companies, startups and their employees — had previously raised money at a $1.1 billion valuation just months earlier. Talks for the current deal are still ongoing, the people said, and the details could change. All of the people asked not to be identified because the discussions are private.
Kleiner Perkins is expected to lead the round, represented by Mood Rowghani, who was also an investor in Stripe Inc. (Last year, Rowghani left the firm when Mary Meeker departed Kleiner Perkins, taking much of the growth fund with her, though the team is still involved in the Kleiner Perkin’s current fund.) Other participants in the Brex round will include existing investors Greenoaks Capital, DST Global and IVP, the people said.
Kleiner Perkins referred a reporter to Meeker’s spokeswoman for comment. Brex, and a spokeswoman for Meeker and Bond Capital, declined to comment on the deal.
Brex was founded by Henrique Dubugras and Pedro Franceschi, both now college dropouts in their early 20s. The company’s ascent into the rarified realm of startups with a multibillion-dollar valuation has been unusually fast, putting it in the ranks of a small group of companies like Lime and Bird Rides Inc., which reached unicorn status extremely quickly.
Early backers of Brex include PayPal Holdings Inc. co-founders Max Levchin and Peter Thiel. People living in startup hubs like like San Francisco and New York may be familiar with the company thanks to its recent aggressive advertising campaign, which has included plastering Brex logos on bus stops and metro cars.
Rather than focus on credit history, as many credit card companies do, Brex uses a startup’s funding data and bank account information in order to issue cards to companies and employees. There are limits as to how much customers must hold in their accounts, which Brex monitors. But because many startups fail or are bought, the business is volatile. At a conference in April, Dubugras said the company has already shut down the cards of hundreds of businesses because they were no longer meeting cash requirements.
As a way to diversify its business beyond relatively fickle startups, Brex recently launched a new credit card aimed at e-commerce companies. The card offers a 60-day interest-free credit line, so if an e-commerce business spends $500,000 stocking up products before a holiday, it can pay with a credit card, rather than potentially having to apply for a loan. Like traditional credit cards, Brex makes money on interchange fees collected during transactions.