Scoop: Brex exiting SMB market to focus on enterprise customers
Brex, the business banking startup valued by venture capitalists at $12.3 billion, is exiting the small business market, Axios has confirmed.
Why it matters: Corporate card and expense management was once a high-flying part of fintech, but they're not immune to the macro economic slowdown.
Driving the news: Brex sent an email to several SMB customers on Thursday, alerting them that their accounts would be closed in two months due to "a change in how we determine account eligibility."
- The company said customers would need to proactively close their accounts, withdraw any funds, and provide updated bank instructions to vendors and other payment recipients before August 15. After that date, they will lose account access.
- It also suggested they redeem any available rewards points prior to their account closure.
Flashback: In April, Brex detailed a new suite of tools for larger customers called "Brex Empower," launching with DoorDash as its first enterprise client.
- The new product moved Brex away from a revenue stream built off debit interchange and toward a more predictable SaaS business model.
What they're saying: When asked for comment, Brex chief communications officer Karen Tillman sent the following statement:
- "Back in April we launched Empower, and we are now putting the full weight of Brex towards building the best global payments platform for tech startups and larger companies. With this focus, we realized we couldn't do a great job serving the small business community at the same time. This has been an incredibly difficult decision for the team and the founders, but we believe small businesses deserve a partner that is entirely focused on them.
- "We know how changes in financial services can be disruptive – especially in a moment like now. We're doing all we can, and working with other financial service providers to make this transition as smooth as possible."