▼ Summary
– Brex has obtained an EU license, allowing it to issue credit/debit cards and offer spend management products directly to businesses in all 30 EU countries.
– Previously, Brex could only serve companies with a U.S. presence, but now it can support EU startups, though banking and bill pay services are not yet available.
– Brex plans to expand into the U.K. and aims to stop burning cash by 2025, a key milestone for its future IPO.
– The company reported strong revenue projections ($500M in 2024) after overcoming financial challenges in 2023, including layoffs due to high cash burn.
– While Brex’s competitors like Ramp and Mercury are raising significant funding, Brex last secured equity VC funding in 2022 but recently obtained $260M in debt financing.
Brex has secured regulatory approval to operate across the European Union, marking a significant step in its global expansion strategy. The financial services provider can now directly issue credit and debit cards while offering its spend management solutions to businesses in all 30 EU countries. Previously, Brex’s services were limited to companies with a U.S. presence, despite supporting transactions in 60 currencies worldwide.
According to a company spokesperson, Brex’s EU authorization allows it to provide embedded payments and corporate card issuance, though banking and bill pay features won’t be available immediately. The move could benefit early-stage European startups, which often struggle to secure expense management tools from traditional banks. However, without full banking services, some businesses may still need alternative solutions.
CEO Pedro Franceschi has already set his sights on the U.K. as the next target for expansion, though details remain undisclosed. The announcement aligns with Brex’s broader financial goals, including plans to achieve profitability by 2025, a critical milestone ahead of a potential IPO. Earlier this year, reports suggested the company is on track to generate $500 million in revenue, signaling a strong recovery after cost-cutting measures in 2023.
The EU approval arrives amid fierce competition in the fintech sector. Rivals like Ramp and Mercury have recently secured massive funding rounds, pushing their valuations to $22.5 billion and $3.5 billion, respectively. Brex, meanwhile, hasn’t raised equity funding since 2022 but bolstered its liquidity with a $260 million debt facility earlier this year.
While an IPO timeline remains uncertain, Brex’s latest regulatory win strengthens its position in the global financial services arena. The company’s ability to scale internationally could prove pivotal as it navigates an increasingly crowded market.
(Source: TechCrunch)
