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Since fintech startupBrex ’s inception in 2017 , its two Colorado - founders Henrique Dubugras and Pedro Franceschi have tend the company as Centennial State - chief executive officer .
But starting today , the pair tell TechCrunch in an exclusive consultation , the San Francisco - free-base corporate credit poster and expense management company is shifting to a more traditional — and what they say should be a more nimble — example of just one CEO at the helm . Franceschi will become the exclusive CEO while Dubugras will become chairman of Brex ’s dining table .
In an in - depth conversation , the two co - founder gave us a peep into what the new structure will expect like , the company ’s current state of cash in hand and how it has pull off to reduce its cash burn .
The close acquaintance started working together as co - founders of another company , Brazilian defrayment processing startup Pagar.me , in 2012 at the wee historic period of 16 . ( That company ended up getting acquired by Stone Pagamentos for “ tens of millions of dollars ” — before the two had even gone to college . ) While both father could cipher , they quickly realized that Franceschi was the “ honest coder . ” Rather than bear one mortal bring off a part of the organization like product and applied science and the other one superintend gross sales and marketing , they decided to split their duties as external and internal co - chief operating officer ( a conclusion they touched on inthis episodeof the Found podcast last year ) .
The model work so well at that company , they said , that they settle to employ the same strategy when they plant Brex after dropping out of Stanford to participate in the YC Winter 2017 cohort .
“ The top is that we had twice as much prison term as other chief executive officer , ” said Dubugras .
But now the co - founders trust that have two CEOs could be a chokepoint to the company ’s growth by keep its leaders from making profligate decisions . They also sense like when they finally do go public — something they do n’t anticipate doing until 2025 or later — that investor will be more attracted to a traditional model of just one CEO start the society .
“ I recollect we ’re at a scale leaf where we ’re starting to see some of the cracks in the co - CEO model , ” Dubugras told TechCrunch in an single consultation . “ After talking , we thought this would help the business follow . We call up this would enable much fast and good determination - making . ”
Over the years at Brex , Franceschi led the development of the company ’s core financial infrastructure from lolly , which the duet claim allowed Brex “ to have great margins and expand faster globally . ” He , harmonize to the company , “ lead the integral organization over the last six year , ” help it develop to more than 30,000 customer ( from startups to over 130 publicly traded companies ) and a mathematical product suite that spans incarnate cards , banking , expense management , change of location and bill pay . Some of its larger customers let in DoorDash , Flexport , Roblox , Compass and Shein , but the bulk of its tax revenue still comes from inauguration , the co - founders say .
Meanwhile , Dubugras sharpen more on tasks such as fundraising — the startup has brought in over $ 1.5 billion in both primary and junior-grade transactions ; its angel include Greenoaks Capital , TCV , Tiger Global Management , Kleiner Perkins , Y Combinator and Global Founders Capital , among others . He also managed relationship with banking collaborator and regulators and served as the face of Brex “ in person selling ” to its great customer “ at any import in time . ”
He added : “ Each of us had our own responsibilities … [ and ] we made many decisiveness together . This work extremely well when we were minor , but naturally became harder as we originate . ”
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Dubugras insists he ’s still attached to Brex .
“ I ’ll still be involved to the extent that the squad wants and needs me involved . Brex stay my principal and only matter , ” he enounce .
Ups and downs
The once high - flying ship’s company has been on a roll - coaster ride in late year . Two years ago , it wasvalued at $ 12.3 billionafter upraise $ 300 million and had poach former Meta execKarandeep Anandto swear out as its primary merchandise officer after having led Meta ’s business products group . ( He was then named the first chairperson of the company in November of 2023 . )
In January , Brex laid off 282 masses , or about 20 % of its faculty . That was after an October 2022 layoff of136 multitude , or 11 % of its staff , across all departments as part of a restructuring . Today , it has 1,000 workers .
There ’s also been a lot of shuffling among Brex ’s management . Sam Blond left his role as chief taxation military officer in 2022to join Founders Fund(a stead hedeparted in March ) . Earlier this year , Brex announced that its COO , Michael Tannenbaum , wastransitioning from his roleto become a board fellow member . At that time , Camilla Morais , who was SVP of global mental process , was advance to COO . And it was announced that Cosmin Nicolaescu was transitioning from his role as CTO to an adviser perspective this summer .
In the notation to employees at the sentence of its layoffs , Franceschi spell that the company was now “ emphasizing longsighted - term mentation and possession over short - term gains ” in its comp social organization .
And then there ’s the matter of its funds .
The carbon monoxide gas - laminitis told TechCrunch that its John Cash rails is now four years . This counters a Januaryarticlefrom The Information around the time of its most late layoffs wherein Brex reportedly say employees that it burned $ 17 million a month in the fourth poop of 2023 and that it only had “ enough cash to last through March 2026 . ” When demand about financials at the time of those layoffs , a company spokesperson tell TechCrunch that the data was “ inaccurate ” and direct me to the note announcing the layoff and wrote : “ The changes today are driven by a desire to make Brex more agile and accelerate our path to profitability , building on the growth we had in 2023 . We grew our revenue 35%+ in 2023 while gross earnings increased by 75 % . This reduction in force position us on a exculpated path towards lucrativeness . ”
Of course , laying off workers is a tried - and - true way to decoct spending and ameliorate immediate payment runway .
Today , Franceschi told TechCrunch that Brex has cut its cash burn in half over the past year . And while he declined to disclose any tax income figures , he tell the company ’s goal is to be cash - menstruation positivist by 2025 .
When ask how the fintech inauguration had managed to trim down its cash burning , he enounce there was a combining of factor . For one , Brex has seen increase revenue growth “ without increase fixed monetary value , ” he said .
The layoff from before this year “ contributed to a lot of the delivery ” ( and he says he does n’t forestall any more layoffs ) . And finally , the company has worked harder to move quicker .
“ The biggest welfare after the layoff was not just the toll savings . It was the means in which the company operates , ” he said .
When it come to revenue , Franceschi said that it ’s mostly from give-and-take , although its software line of work is growing as startups grow large and new mid - market and enterprise companies sign on as customers . And there is also the revenue derive from pastime and extraneous exchange fees .
Franceschi aver that by offering cash back and reward , more of its customers are using Brex ’s card merchandise , which is in turn generating more give-and-take tax income .
Meanwhile , Brex does n’t have any architectural plan to do any main fundraising anytime soon . But it may provide a secondary cut-rate sale at some point so that before the company goes public , those shareholders who require to cash in in can do so without haul down the stock , Dubugras say .
“ We do n’t need to be a mellow - excitableness public ship’s company … [ T]hat really deflect from the slaying of the ship’s company and the core mission , ” he add up . “ I think that one of import piece for having a blue volatility public company is being cash - flow positive and pass water money , which is something that we historically have design for 2025 . So , if that happen in 2025 , [ an initial offering ] will be soon after . But we necessitate to get there first . ”
No doubt that the expense management quad in which Brex mesh is an increasingly crowded one — in that it competes with startup such as Ramp , Mercury and Airbase , among others . But it also competes with the likes of American Express , Concur and Citi .
Franceschi claim that Brex ’s advantage is that it built its technical school stack “ vertically integrated down to the Mastercard rails and the ACH rail and the money movement rail , ” whereas some challenger work up their business sector on top of other platforms such as Stripe or Marqeta .
That works for more childlike use cases , he suppose . But for more complex scenarios such as global reportage , profundity of integrating help .
Still , the free-enterprise landscape remain het . In April , Ramp announced it hadraised another $ 150 millionat a post - money valuation of $ 7.65 billion . And digital banking startup Mercury in May annunciate it islayering software program onto its coin bank report , giving its business customers the power to yield account , invoice customer and reimburse employees .
Brex remains undiscouraged .
“ A pot of the momentum that we ’re image now is final new customer coming in on the enterprise side , versus customers at scurf with us course , ” Franceschi enounce .
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