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Capital One to acquire Brex for $5.15B

reuters.com

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Re: Capital One to acquire Brex for $5.15B

#31

Post by hn_throwaway_99 »

logicallee wrote: post #18
verdverm wrote: post #14

They refused my business because I didn't have SV VC money Chase got it instead, but they are losing it next month because of their shenanigans and greed Wish crypto hadn't been co-opted by the same people and worse

I see you getting downvotes, but can you elaborate a little on what happened? What kind of business did you mean? If you don't want to share more here, you can email me.

Brex got out of the SMB segment in 2022 and required some sort of "professional funding" for clients (e.g. VC money or sizable angel funding). There was a lot of reporting on it at the time: https://techcrunch.com/2022/06/19/what-was-really-behind-bre...

Re: Capital One to acquire Brex for $5.15B

#32

Post by hn_throwaway_99 »

rvz wrote: post #17
paxys wrote: post #13

Sold for $5.15B. Brex last raised $300M in Oct 2021 at a $12.3B valuation.

That is a 50% discount, which isn't great for those who got into the latest round. Seems like Capital One is very excited on the deal and announced it earlier while Brex hid the announcement and made it hard to find. (It's on the Brex [0] journal directory, but you cannot see it featured on its front page) What (really) happened? [0] https://www.brex.com/journal

Its not great for those who got in later rounds, but I would assume all the investors had at least 1X preferences, so they'll at least get all their money back.

I think this is a pretty decent outcome for Brex. I read they received a total of 1.3 billion in funding, so a 5.15 billion exit isn't bad, especially since the bottom dropped out of the market for so many fintechs that were founded and had big raises between 2015 and 2021.

Re: Capital One to acquire Brex for $5.15B

#34

Post by n2d4 »

rvz wrote: post #17
paxys wrote: post #13

Sold for $5.15B. Brex last raised $300M in Oct 2021 at a $12.3B valuation.

That is a 50% discount, which isn't great for those who got into the latest round. Seems like Capital One is very excited on the deal and announced it earlier while Brex hid the announcement and made it hard to find. (It's on the Brex [0] journal directory, but you cannot see it featured on its front page) What (really) happened? [0] https://www.brex.com/journal

This is a weird theory. Brex sent an email to all customers, alongside posting everywhere on social media. You are making your conclusions because they didn't put the announcement on their landing page?

Re: Capital One to acquire Brex for $5.15B

#36

Post by [deleted] »

bmau5 wrote: post #11
htrp wrote: post #10

Earlier quoted context omitted.

I assume if you put in 100 mn at a 12 bn valuation in the last round, you're either getting 100 back at 1x pref or you're screwing over the common even more? Considering the 12bn round was back in 21, I'd expect most of the employee base to be taking a haircut on the value of their options.

assume it's the $1.2bn paid back to investors and then some divvying of the remaining amongst investors, founders, and common

[deleted]

Re: Capital One to acquire Brex for $5.15B

#37

Post by ghxst »

SaltyBackendGuy wrote: post #25
whalesalad wrote: post #23

Years ago I took a chance on hiring an engineer fresh out of a software bootcamp. Turned out to be one of the best engineers I have ever worked with - so much tenacity and thirst for learning new things. They went on to join Brex when the company was just starting out. What an awesome exit!

Hopefully they had the confidence/insight to negotiate properly. I went through BN$ exit (was employee 19) early in my career and unfortunately, only select people at the top got retirement money. The most frustrating part was the Big Co. execs that came in much later, did literally nothing, and got a massive payday. Lesson learned though...

That really sucks. Any advice on how to "negotiate properly" to avoid a situation like this?

Re: Capital One to acquire Brex for $5.15B

#38

Post by bflesch »

rvz wrote: post #17
paxys wrote: post #13

Sold for $5.15B. Brex last raised $300M in Oct 2021 at a $12.3B valuation.

That is a 50% discount, which isn't great for those who got into the latest round. Seems like Capital One is very excited on the deal and announced it earlier while Brex hid the announcement and made it hard to find. (It's on the Brex [0] journal directory, but you cannot see it featured on its front page) What (really) happened? [0] https://www.brex.com/journal

It's as easy as some VC bros desperately searching for a bigger fool and finding it. Most likely CapitalOne management consists of friends with the VCs.

It's just another case of the principal/agent problem and normalized white-collar fraud in US tech.

Re: Capital One to acquire Brex for $5.15B

#39

Post by aluminussoma »

churchill wrote: post #8

Pretty steep haircut from their $12b peak in 2022. And that's before you factor in their revenue that's grown 2.5* from ~$312M in 2022. If their figures are to be believed, Capital one is getting an asset growing 50% YoY, for just 7* revenues. Maybe just pull a Bending Spoons after the acquisition, layoff most of the staff, and bring a lot of ops in-house and they'll be in profit ASAP.

If growth rate was really 50% YoY, their investors would not let them sell for $5 billion.
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