Axios Pro Exclusive Content

Brex CBO talks growth plans

Illustration of a percentage sign seen through a magnifying glass.

Illustration: Brendan Lynch/Axios

After laying off 20% of its workforce, expense management startup Brex is seeking to strike a balance between cost-cutting and amping up revenue growth, chief business officer Art Levy told Lucinda at Fintech Meetup.

Why it matters: Growth remains a startup priority, especially as public market fintech valuations have rebounded (somewhat).

The big picture: When asked about the metrics Brex was looking to measure itself by, Levy pointed to the Rule of X — a metric recently coined by Bessemer Venture Partners.

  • The rule puts a greater emphasis on growth over free cash flow margins, compared with traditional metrics like the Rule of 40.
  • "In my conversations with investors, there is more of a focus on on growth ... especially in the last six months," said Levy. Though he cautioned that "it's always changing back and forth."

Context: Traditional metrics for tracking startup valuations flew out the window during the pandemic. But as the market froth has dissipated, companies (including Block) increasingly speak about aiming once again for the Rule of 40.

  • The famed metric for software companies dictates that the company's combined growth rate and profit margin should exceed 40%.

Flashback: "We were a big beneficiary there," he said of the SVB deposit outflows — much of which landed at Brex — last year. "But it also impacted us by causing us to focus on our deposits business maybe more than other parts of our business."

What's next: Brex plans to grow, but more efficiently and carefully than before.

  • "We definitely don't need to cut more spending at the moment. But that doesn't mean we're not being super-careful about every dollar that we're spending now," Levy says, noting that the firm has slowed hiring.
  • Co-CEO Pedro Franceschi told the Information in February that the company plans to hit cash flow positive in 18 months to two years.
Go deeper