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Business Models Business Operations

How Does Brex Make Money (Business and Revenue Model)

The Brex business model

Brex logo
Here’s what you should know:
  • What is Brex, and how does Brex work?
  • How does Brex make money?
  • Subscription Revenue (Brex Premium)
  • Interchange Fees (Brex Credit Card)
  • Interest from business cash accounts (Brex Cash)
  • Brex funding, net worth, and valuation
  • Brex profit and revenue
  • What is the Brex business and revenue model?
  • Brex subsidiaries, acquisitions, and exits

How does Brex make money? Well, here is a full, in depth, breakdown of their three (3) revenue streams and the different products and services they offer, as well as the Brex business and revenue model, how much Brex makes per year, and how Brex works.

What is Brex, and how does Brex work?

Brex is a fintech company that offers small business customers fast growth solutions like financing, credit cards, cash management, and more.

Founded in 2017 by Henrique Dubugras and Pedro Franceschi, Brex now has more than 10,000 customers ranging from small to large businesses using its services.

So, how does Brex work? To use Brex, simply download their app from the Apple App Store or Google Play store, or visit their website.

Once there, open an account and fill out your Brex application which is all related to your business’s information (monthly revenue, monthly spend, source of funding, etc). If approved for an account, you can choose from the various Brex products you’re interested in for your business.

Some of Brex’s competitors include Stripe, Square, Divvy, and other fintech companies that offer fast growth business products.

Brex App in Apple App Store | Brex Business Model | How Does Brex Make Money? | How Does Brex Work?
Source: Apple App Store | Brex

How does Brex make money?

According to Brex, Brex has more than 10,000 customers ranging from small to large businesses using its services. So how does Brex make money off of all these customers?

Below is a breakdown of how much money Brex makes and its revenue model. Including all revenue streams and how much they charge for their services.

Here are the 3 ways how Brex makes money in 2022

Brex has a revenue model that makes money in three (3) ways; through subscription revenue (Brex Premium), interchange fees (Brex Credit Card), and interest from cash in customer business cash accounts (Brex Cash).

#1. Subscription Revenue (Brex Premium)

One of the ways Brex makes money is through its subscription service revenue, Brex Premium.

For $49 per month, Brex Premium members get an all-in-one dashboard combined with Brex credit cards, Brex Cash business accounts, new spend management, and bill pay software.

How much does Brex cost? (Brex Premium)

  • $49 per month

#2. Interchange Fees (Brex Credit Card)

Brex also makes money off of the interchange fees they receive from their Brex credit cards that are issued to qualifying business users who are incorporated in the US, do business in the US, and have a US EIN.

How does Brex make money from interchange fees? Brex makes money whenever a Brex cardholder swipes their Mastercard issued credit card.

When this happens, Mastercard charges the merchant an interchange fee between 1.25% + $0.05 to 3.15% + $0.10 of the charge amount. From that, Mastercard gives a percentage of its interchange fee revenue to Brex. Although it’s unclear what percentage Brex receives from Mastercard.

Brex Mastercard Credit Card | Brex Business Model | How Does Brex Make Money | How Does Brex Work
Source: Brex

Brex closed thousands of business Cash accounts and Brex cards on August 15, 2022, of small business customers that no longer meet their new small business criteria.

#3. Interest from business cash accounts (Brex Cash)

In addition to subscription revenue and interchange fees, Brex also makes money through the interest they earn on the money sitting in users’ Brex business cash accounts.

How does Brex make money and earn interest from this? It’s common for a bank or financial institution to lend out the money sitting in their members’ checking/savings accounts to other financial institutions. Those financial institutions then pay Brex interest on that money in return.

This is known as Net Interest Margin (NIM). And nationally it was 2.56% for all U.S. banks as of Q1 2021, according to a press release from the FDIC.

Brex funding, net worth, and valuation

According to Brex’s Crunchbase profile, Brex has raised $1.5 billion over 11 rounds and has a valuation of $12.3 billion as of January 2022.

Brex profit and revenue

Brex has not released any official reports in regard to company earnings.

Note: Because Brex is a privately held company, they are not required to make their annual reporting, such as Form 10-K’s, pubic.

What is the Brex business and revenue model?

Brex makes money through a few revenue models that they combine within their company, they are:

  • Subscription business model
  • Fee for service (FFS) business model
  • Interest revenue model
  • Business to business (B2B) business model
  • B2B2C (partnerships) business model
  • Mergers and acquisitions (M&A) business model

Brex subsidiaries, acquisitions, and exits

To date, Brex has made a total of 6 acquisitions and 2 investments.