Brex, a startup credit card provider, recently announced that it has raised $ 50 million in a Series B round. The San Francisco-based company has raised a total of $ 57 million so far.

In this round, PayPal’s founding members Max Levchin and Peter Thiel, as well as FinTech investor Ribbit Capital, Facebook’s early investor Yuri Milner and Visa Former CEO Carl Pascarella and others participated.

Brex uses its own model to scrutinize startup creditworthiness. The company does not look at the credit history of the founder’s individual or the expected profit of the company, but checks the account balance of the company and sets about 10% of it as the credit limit.

Co-founders Henrique Dubugras and Pedro Franceschi have a history of launching an online payments company,, in Brazil in 2013, when they were still in their third year of high school. According to Dubugras, three years later, the number of employees has grown to about 100 and it has been sold to Brazilian credit card company Stone for tens of millions of dollars.

Last year, the two moved to Silicon Valley to attend Stanford University, but dropped out in just three months to join Y Combinator’s accelerator program. They launched Brex to solve the problem that Y Combinator participants couldn’t make a credit card without a guarantor

Dubugras was 22 and Franceschi was 21. Asking them where the company name came from, CEO Dubugras replied:

“I’d like to tell the story behind the company name, but the truth is that I bought it because a good-sounding four-letter domain was on sale at a reasonable price. It’s common in startups.”

The cards offered by Brex are from the Visa brand, and the credit limit is tied to your account balance, for example, if your balance is $ 100,000, the limit is $ 10,000. When the balance drops to $ 50,000, the limit is immediately reduced to $ 5,000. The maximum amount is $ 50,000 to $ 100,000. Brex is affiliated with Ohio-based “Sutton Bank,” which is the issuer of credit cards.

Target companies that raise more than $ 100,000

Brex also uses publicly available data in credit scrutiny. For example, we refer to the startup database “Crunchbase” to see if we are raising funds from professional investors such as venture capital. Brex offers its services exclusively to startups that have raised over $ 100,000 from professional investors.

In the United States, the unemployment rate is at its lowest level in 18 years, and the inflow of more money to technology companies than ever before continues to make it easier for startups to raise funds and get loans. But once the market environment deteriorates and startup failures increase, Brex will need to lower its credit line from its current average of 10%.

“The rules allow us to change the limit as the market environment changes,” a Brex spokeswoman said. Brex’s revenue sources are an annual fee of $ 5 per user and a fee collected for each payment. The company aims to reach $ 300 million in transaction volume by the end of this year. If this goal is met, the company’s sales are expected to reach $ 5-10 million.

According to Dubugras, 1000 companies are using the company’s services, including companies such as SoFi, Affirm and Lending Home. Until now, it provided services for startups, but in the future it plans to expand the target to larger tech companies and companies in a wide range of industries.

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