Brex co-founder Henrique Dubugras particulars selections behind pivots, layoffs, going distant • TechCrunch

It’s been an eventful yr for fintech Brex.

The yr started with affirmation that the startup had raised $300 million at a $12.3 billion valuation. In April, the corporate introduced a shift in technique — a brand new emphasis on software program and the enterprise. By June, it despatched shock waves within the startup world when it introduced it could now not serve small companies funded exterior the enterprise capital construction. Extra just lately, it laid off 11% of its employees.

One of many buzziest fintechs on the market, Brex is understood for greater than its product choices. Its charismatic co-founders and teenage hackers Henrique Dubugras and Pedro Franceschi dropped out of Stanford to start out the corporate as a part of Y Combinator of their early 20s. Years later, newer startups in YC cohorts nonetheless tout themselves because the “Brex for X.”

At TechCrunch Disrupt 2022, I sat down with a refreshingly candid Dubugras and Anu Hariharan, YC’s managing director for continuity and an early Brex investor, to reveal the context round this whirlwind of a yr. The interview has been edited for readability and brevity.

Azevedo: Inform us about if you first began Brex. I consider you have been in your early 20s?

Dubugras: I used to be born and raised in Brazil, and out of highschool, I began a funds enterprise in Brazil that did cost processing, so form of like a Stripe of Brazil. After promoting that firm, I moved to the U.S. to go to varsity after which dropped out to start out Brex.

The primary concept that we obtained into YC wasn’t truly in fintech. It was a VR firm. Once we offered the final firm, we have been uninterested in fintech. We’re like, “All these banks and regulators are so difficult. You recognize, we’re now in Silicon Valley. We need to do one thing on the bleeding fringe of know-how.” So VR appeared prefer it. However just a few weeks into YC, we realized that we had no clue what we have been doing and determined to pivot into Brex.

In Brex, the primary worth proposition was once we realized that there have been all these startups that had raised tens of millions of {dollars} and couldn’t get a company card. We have been like, “That makes completely no sense. How are you going to have raised 3, 4 or 5 million {dollars} and nonetheless not be capable to get a company card? So you already know, that’s what we determined to do early on.”

So the final time you have been at Disrupt was three years in the past if you have been launching Brex Money. Round that point, you had billboards everywhere in the metropolis — you couldn’t move a bus cease with out seeing Brex on a billboard. You have been aggressively advertising and marketing to startups in form of an old-school approach. However then earlier this yr, you had a shift in technique: You introduced that Brex was making a push into software program and that you just have been going to be specializing in the enterprise. After which this summer time, you talked about now not working with SMBs and non-professionally-funded startups. Now this shocked — and upset — lots of people. What led to this choice of such a change in your technique?