Accounting & Bookkeeping

What Is Brex? And How To Use Brex?

What Is Brex? And How To Use Brex?
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Brex is a financial technology startup that mainly provides early-stage businesses with a corporate credit card. Additionally, business owners can open a bank account with the company Brex Cash and use its many spending management capabilities for their organization.

Brex generates revenue from monthly account fees, interchange charges, referral commissions from cashback offers, interest on loans, and interest on funds retained in customer accounts.

Two Brazilian people in the business founded the company in 2017, and by Silicon Valley standards, it has been a tremendous success. Brex has secured venture capital funding totaling more than $1.8 billion.

Brex: How Does It Work?

Brex: How Does It Work
Brex Works

A financial technology startup, Brex offers a business credit card, a cash account, and several software applications for managing costs, taxes, and other things.

According to the FED's Small Business Credit Survey, receiving credit ranked as the second-biggest issue for small businesses in America. As a result, Brex focuses on technology startups in their early stages that require easy and dependable access to finance.

Brex provides cards to life science, e-commerce, late-stage, and enterprise firms in addition to startups.

Instead of using an individual's credit history and score, as is common with many other credit cards, credit limits are determined by a company's cash flow. Brex considers a company's financial stability, sales volume, and spending habits. Additionally, the cardholder has no personal liability.

Because the Brex Card is a charge card, it must be fully paid off every 30 days. A company's bank account is automatically debited for payments. As a result, Brex will need access to your company's bank account, which has previously been questioned by several of its clients.

Brex has several features available through the company's website or mobile apps (Android or iOS). Some instances are:

Quick sending and receiving of money are made possible by cash management solutions.

Instant receipt matching, a snapshot of the company's spending patterns, and connectivity with other account tools are all features of expense management (e.g., NetSuite, QuickBooks, or Expensify)

Protection against fraud and theft, as well as assistance with any issues that may arise for the customer

Finally, users can benefit from using their cards to make purchases. Uber, Lyft, American Airlines, Starbucks, and many more are examples of reward partners. The acquired points can then be exchanged for products and services like AWS or Slack discounts.

How does Brex generate revenue?

Brex generate revenue
Brex generate revenue

Brex generates revenue from monthly account fees, interchange charges, referral commissions from cashback offers, interest on loans, and interest on funds retained in customer accounts.

Brex's business strategy is to acquire consumers through its corporate credit card and cross-sell auxiliary services to them.

Brex offers entrepreneurs a variety of options, such as expenditure tracking, quick income distributions, or interfaces with other software products to enhance the value of their offering.

It can further monetize those consumers by providing them with loans, cashback rewards, and other services in addition to a corporate credit card.

Without further ado, let's examine each of Brex's income sources in the following section.

Recurring subscription:

Employers must pay a monthly subscription charge to access Brex Premium to utilize the corporate card.

As many users as needed are allowed access for a monthly fee of $49. Products from Brex include bill-pay and spend management software solutions and the option to create unique spend rules.

Brex began by charging $5 per month for each user. 2018 saw the company's inception; a year later, it had 1,000 paying customers. The company switched to the Premium package in April 2021, which currently offers limitless access.

Transfer Fees:

Like every FinTech, such as Revolut, Monzo, or N26, Brex collaborates with a payment processor (in this case, Mastercard) to provide its consumers with a credit card.

Traditionally, the credit card company retains a portion of the purchase price when a customer uses that card to pay (called interchange fee). In the case of Brex and Mastercard, this commission is split between the two parties.

The maximum Mastercard transaction fee is two percent. It is not known how much of the interchange charge Brex will keep.


Customers can accrue points that can be later redeemed if they make purchases at one of the company's Brex partners. Customers might earn up to 7 times as much depending on where they spend the money.

Brex targets startups. Therefore points can be redeemed at businesses that make items for these businesses. Credits on AWS, Slack, HubSpot, Zoom, Indeed, and many other services are examples.

Brex will probably profit from every transaction it facilitates through its partners, as with any cashback program (via so-called referral fees). As a result, they can build their company and reinvest the profits in Brex.

In some cases, businesses profit from marketing rewards. It is not known whether that applies to Brex and its partners.

Expenses for Loans:

Brex Venture Debt, a funding program for startups and other high-growth companies, was introduced in 2021.

Brex has launched the service with a $150 million budget. Through the service, it hopes to compete with financial institutions like Silicon Valley Bank, Bank of America, and others.

Through the interest on the loans, Brex makes money off of this program but doesn’t make their rates available for the general public.

Brex has one undeniable advantage: it has comprehensive information on its customers' spending patterns and overall financial health.

As a result, it can determine with greater accuracy the likelihood that a borrower will fail on a particular loan.

Brex Money:

A business cash management account called Brex Cash is linked to the Brex Card. It functions exactly like a conventional bank account in that users can store money and receive interest on the money in their account. Brex Cash was developed in collaboration with Radius Bank of Boston (many other FinTechs go through similar processes to secure reputable banks as underwriters, which helps to mitigate any potential risk).

Brex won't provide its customers services through physical branches like typical banks because everything is done digitally. Users no longer need to log in to their home bank because the cash account is linked directly to the credit card.

With the cash they keep in the account, holders can earn interest. The yield is 0.1 percent as of the drafting of this sentence. The funds are accessible anytime needed and are kept in a government money market fund with low risk.

Any startup, regardless of funding, can set up a Brex account to keep cash with Brex Cash. As a result, there is no longer a need for the company account to have at least $100,000 in it.

Brex, like any other bank, uses the funds in user accounts to make loans to other organizations, including other banks.

They then charge these organizations interest (also called Net Interest Margin). 

Funding, valuation, and revenue for Brex

Crunchbase claims that Brex has raised $1.8 billion over twelve rounds of venture capital funding.

Y Combinator, DST Global, Kleiner Perkins, Peter Thiel, and Max Levchin (co-founders of PayPal), Ribbit Capital, and Barclays Bank are a few notable investors. Barclays Bank also led another $100 million loan round in April 2019 and is another notable investor.

After receiving $300 million in Series D-2 fundraising in January 2022, Brex's current market value is $12.3 billion.



Brex is not yet required to make revenue information available to the public as a privately held corporation. However, co-founder Dubugras claimed that the business had doubled its revenue the year before in January 2022.