Corporate spend management fintech Brex has had a great deal to celebrate this year, having marked over $1 billion on its balance sheet after a series of blockbuster fundraises. The only sour note in its recent history has been the company’s June announcement that it would no longer work with small business clients, effectively slashing its user base by a massive percentage.
Even Co-founder and Co-Chief Executive Officer Henrique Dubugras characterized the move as a “huge reputation hit,” indicating that it would be difficult if not impossible to return to that market segment.
Yet even if that is the case, Dubugras explained in an interview in early November that the move was the right one for Brex. Indeed, Dubugras is certain that the choice to focus exclusively on investor-backed startups has been the key to the company’s continued success.
While there was no shortage of demand for Brex’s popular products among its small business clients, Dubugras said, the rapid growth of this sector left it lacking in resources to devote to the more complex needs of its startup customers. “As [the startups] started growing, they started having all these new needs,” Dubugras said, “and they basically told us, ‘Look, if you don’t solve these new needs that we have, we’re going to have to go somewhere else.’”