Fintech Innovation at Scale

Embedded Partners
Risks, hard choices, and Brex's fintech innovation at scale

Welcome to the SMB Tech Innovators podcast powered by Gusto, where we explore the intersection of fintech innovation and vertical SaaS, and how software combats the rising complexity of running a business. We aim to share stories, advice, and best practices from the leaders and investors behind today’s cutting-edge platforms. 

Today, we’re speaking with Henrique Duburgras, Founder and Co-CEO at Brex, a financial services and technology company offering cash management solutions and business credit cards to technology companies. Tomer London, Gusto Co-founder and CPO explore Brex’s mission to empower employees anywhere to make better financial decisions. Through a first-of-its-kind solution, Henrique goes into detail on creating verticalized solutions for their customers, scaling quickly while making every dollar count, and managing risk all along the way. 

Highlights include:

  • When it’s the right time to start expanding and adding additional products
  • How to evaluate attach rates for new products
  • How fintech innovation has changed the SaaS industry
  • Current market trends by the numbers

The following excerpts are from the podcast and have been transcribed and edited for clarity.

For folks who don’t know about Brex, tell us a little bit about the company and the product you offer. 

At Brex, we do corporate cards, spend management software, and business accounts for startups and larger businesses. We started the company back in 2017. I was originally born and raised in Brazil. The first product that we launched was Brex, the corporate card for startups. If you’re from San Francisco, you probably saw our billboards back in the day.

We started the company in 2017 and launched it in 2018. In 2019, we launched our business account product, which can replace your bank account. We then launched bill pay and some expense management. Recently we launched Empower and Global, which is our kind of larger spend management solution in global solutions. Been a five-year journey so far, and a lot more ahead.

What is the target audience for Brex today? And how did they evolve over time?

We started serving startups. For us, back then, a startup was a company that had raised any kind of venture funding, and the reason we served them is that even if you had raised two, three, or four million dollars, you still couldn’t get a corporate credit card. You had to give a personal guarantee or deposit money. It was really hard for a company, so everyone had debit cards or you were using personal Amex here and there. And Brex’s first value proposition is, “Look, if you raised a million dollars” or even less, $120,000 is our minimum, we’re going to give you a corporate card with higher limits than you would’ve gotten normally, and no personal guarantee and kind of like a great product, great interface.

We started getting to a good amount of market share and we’re like, “where are the next places we’re going to expand?” And we had basically three choices. We had choice number one, which was going to another vertical, right? We could go to another vertical. eCommerce for example is a vertical. Choice number two is we could go say, “Hey, it’s actually not vertical at all. We’re going to go to the broad, small business market” and choice number three is we’re going to go now to larger companies. Instead of serving just small startups, we’re going to go to larger companies.

And we tried to do all of them. What we realized over time is that doing all of them was really hard. They had completely different needs and expectations in terms of support and stuff like that. Then we said, “which of these three kinds of expansion opportunities we’re going to focus on?” The choice was kind of made for us a little bit because the startup customers that we signed up early on, they grew, and they became big companies. Scale AI for example, when they signed up, they were just the founders. Now it’s a $7 billion company of almost a thousand people. Airtable, Flexport, and I can keep going in these startups that when we signed up, were actually pretty small and then became really big over time.

Then we decided, “we need to build things to serve their new needs.” We decided to focus on startups and mid-sized large customers. The reason startups are different is that we still do have that differentiation of the underwriting. It’s still something that we do that the traditional companies don’t and they eventually grow to become larger companies. Every product that we’re building for the larger companies actually kind of applies to startups as well. There’s more product market fit within there. 

That was a very long answer to your question, but that’s been the journey that we went through.

Tell me a little about how you’re thinking about build versus partner versus buy.

It’s a very complicated question, and I think that we probably made some mistakes here. And I think the advice that I would give is there are two kinds of products in my view, the first product is the one you land customers with, and the other is the one you expand into customers. I think whenever you’re building a new thing, just being clear what that is, and I think if on the expand product, the thing that it helps you is increasing the LTV so you can spend more on CAC and acquire even more customers. That can be a good reason to do it. The second reason can be it’s another landing product. You’re increasing the total base in which you’re getting customers. I think just being super understanding of where your new product is going to fit. Especially as you’re in a growth phase, the total amount of customers that you have probably is where you should focus on initially, because you can always keep cross-selling them many years later in the future.

I think the other point I would make here is there are products that the combined version of your product delivers more value than the individual version of your product. I’ll give an example of us. If you use card plus expense management, we can deliver a much, much, much better experience than if you just use either of them, right?

Let’s talk about the return. Let’s talk about the investment. First, on the return side, did you find a good way of evaluating attach rate?

Going back to my previous point of “is the integrated experience 10x better?” That is probably the biggest predictor of the attach rate, and it’s an order of magnitude difference if that makes sense. The products that we had that we thought the experience was 10x better, had a 40-50% attach rate. The products that we had didn’t have that, was like 5% to 10%. In our view, it was like it’s just being really real about does this point of integration add value or is it just being in the same place. That’s not enough a lot of times, In a competitive market.

You have great insight into what people are spending across cohorts of thousands of customers. Can share any specific trends you’re seeing to help others understand what’s going on in the market right now?

We definitely see a lot of interesting things. For example, advertising and marketing have been significantly reduced in spend over the last few months. Also, spend on consultants and contractors and general merchandise. All of that has decreased a good amount as well. Meanwhile, SaaS and servers were pretty flat actually. It’s an interesting data point. Because a lot of people ask how will SaaS do in recessions and all of that? People saying, “Oh my God, let me go kill my SaaS fields because it’s a recession,” And I think at least for now, we’re actually not seeing it. 

We’re seeing T&E actually go up a lot. I think the travel rebound from COVID remote, people want to see each other. That’s still going up like crazy. In terms of just the startup market in general, we’ve seen the funding drop around 20.8% for the second quarter this year, which is a lot I would say compared to only a 5.4% drop last year. The only thing though that has been interesting is we’ve actually been seeing a lot of unannounced rounds. A lot of companies raising some money that they just don’t announce to anyone, and those could be down rounds, could be structured debt, those could be bridge rounds, up rounds that are not announced, whatever it is, but we’re seeing a lot of money coming in that’s unreported.

We’re also seeing cash burn decrease pretty materially. I think there’s no one that’s doubting that we’re in a macro problem and people are adapting faster than we’ve seen before. 

Any advice for founders navigating this and CEOs and leaders in technology companies, from what you’re seeing in terms of how to use fintech innovation to optimize their spend?

Make sure you’re still letting spend go to the places that matter and are going to help your growth. I would say a couple things. One is this is an amazing time to instill a culture of financial discipline. And that’s one of the things that we try to do with our products at Brex is I think a lot of people say, “Oh, we’re going to help you save money,” but okay, save money where? For us, this recession is the best time to teach our company to value money. And that is the culture that you want for the next 10-20 years for business. 

The number two thing is focus.  What are the things that are the most important and just do those, right? This is the time when it’s okay to let some competitor take some adjacency that you may have to compete later, as long as you’re growing your core thing. I would say that at least for us, whatever those things that are going to be short term and have short-term impact and medium-term impact, keep focusing on them. For things that are very long-term, I would say probably the time is now to reshuffle those resources into your core and keep focusing.

“Now is an amazing time to instill the culture of financial discipline in your company.”

Henrique Dubugras
Founder and Co-CEO, Brex

It sounds quite straightforward. What do you think holds people back from following this advice?

I think three things. One is just a lack of clear prioritization. I think the exercise of if you could just do one thing, one thing only, you have to kill everything else, what would that thing be? I think having that very clear and making sure that everyone in the company understands what the priorities are. It doesn’t mean you have to stop doing everything else. But in general, if people had to prioritize between this thing and that thing, they would know where to prioritize. I think founders, think they know that, but then the rest of the company doesn’t, right? Because you have all these OKRs and everyone kind of pushes their OKRs.

The second thing is I would say fear is a strong argument. People never want to be the one that makes the risky call in an uncertain environment. I think you, as a founder and CEO, need to be the steward of risk in the company and tell everyone which risk you are comfortable with and which you’re not. And business is a risk, you know? Business is knowing what risk to take and what risk not to take. And you should keep taking some risks in your company.

How do you create a culture that celebrates and puts emphasis on speed of execution?

I would say that if we ran a survey, and asked people how much of their time do you spend on real work? How much of your time is spent doing other stuff? How many times you’re coding and writing code or writing the architect, like actually doing work. And you’re going to find out as you do that, find out different errors and different bottlenecks and different things that take time.

We have a quarterly survey for people. Then the managers themselves, we have this value called impatient optimism that kind of creates this kind of urgency in the company. But we as leaders, need to help unblock people. 

Listen to the entire podcast with Henrique on Spotify or Apple.

To learn more about Brex, visit And, to get notified when new podcasts are available, subscribe to the Gusto Embedded Newsletter.

Updated: March 27, 2023

Daniel Dean With over 10 years experience in HR tech, Daniel is passionate about payroll and everything HR. As a Gusto Embedded Sr. Product Marketing Manager, he believes this is one of the most exciting times for HR. Whether you're a HR professional, payroll administrator, business owner, or work for a SaaS solution provider, he believes we all have an important role to play in shaping the future world of work for the better.
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