Enterprise Weekly #545: Capital One Buys Brex, Importance of Humility & Clarity for Founders, and More
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Happy Friday!
We didn’t have to wait too long for our first M&A splash in the world of enterprise software. On Thursday, Capital One acquired Brex for $5.15B. It’s full circle, given that Capital One also acquired Ramp co-founder Eric Gylman’s first company, Paribus.
Some interesting data points:
The acquisition represents 3.5% of Capital One’s market cap.
Brex brings with them 25K customers. While the company started off selling to startups, 25% of revenue is now enterprise.
As of last fall, they were at $700M of revenue and growing 50%.
This is the marriage of two founder-led companies, as Capital One’s founder Richard Fairbank is still running the company as CEO today!
There’s a number of lessons to be learned from Brex. The company started in 2017 and set the fastest record to $100M in revenue back in 2018, in the days pre-AI. They entered an industry (corporate cards) where early stage startups didn’t normally sell, being first of their kind. They are reflective of the fact that startup journeys are never always up and to the right; there are good times and there are bad times, and the fortitude to stick with it is nontrivial.
There’s been a lot of talk in recent days about the valuation Brex got bought at. It’s interesting to hear the perspective of Brex CBO Art Levy:
“With Brex, because we had this meteoric rise and then we had a few years of figuring things out and then a turnaround, what that meant is that we are actually pretty well positioned to understand how public market companies are valued. We understood what great businesses, businesses like Shopify and Toast and Adyen and Affirm and Navan, trade at. And when looking at those multiples and those gross profit multiples, this is actually an insanely premium deal and a very, very well-priced deal for everyone.”
Having the humility to acknowledge being in a state of figuring things out (every company experiences this!) and the clarity to align with the new reality are traits that all companies can learn from Brex. Congrats to them on a great outcome!
🎤 Founders & Falsettos | A New Year NYC Karaoke Jam (Jan 27th): Work-Bench is excited to co-host a New Year karaoke night for NYC founders and operators, alongside our friends at Flybridge, Next Wave NYC, The Venture Collective, Mercury, and Ramp. Join us for an evening of karaoke, drinks, and conversation with people building and operating some of NYC’s most interesting companies. Whether you’re stepping up to the mic or just enjoying the crowd, it’s a relaxed way to connect with the broader startup community and kick off the new year together. Sign up here.
🚀 From Engineer to Founder: Building and Selling Developer Tools with Extend (Feb 12th): Work-Bench is hosting an intimate fireside chat with Kushal Byatnal, Co-Founder & CEO of Extend, for a candid conversation on building and scaling enterprise software. We’ll dive into Extend’s founding story, Kushal’s transition from engineer to founder, and the real lessons behind product-market fit, go-to-market, fundraising, and building with AI. It’s a small, curated gathering designed for thoughtful conversation and high-signal connections with NYC founders and operators. Sign up here.
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Funding: $20.5M from Work-Bench and Norwest Venture Partners
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Wow, the part about Brex's record-setting growth in the pre-AI days really stood out to me; it makes one reflect that the grit and fortitude you highlighted are still the most crucial algorithms for success, even before the big neural networks arrived, and your insights are truly brilliant.