The Big Read - Once Upon a Time in Silver Lake: How Worklife Ventures founder Brianne Kimmel is expanding her sphere of influence from Silicon Valley to Hollywood. Read Now

Henrique Dubugras, co-founder and chief executive office of Brex. Photo by Bloomberg
Exclusive
Venture Capital Startups Markets

As Recession Looms, Brex Stockpiles Cash, Cuts Credit

Photo: Henrique Dubugras, co-founder and chief executive office of Brex. Photo by Bloomberg

Before the coronavirus outbreak, Brex had become the poster child of Silicon Valley largesse. By offering fellow startups high-limit charge cards, its 24-year-old founders had attracted illustrious investors like Kleiner Perkins, rocketing Brex to a $2.6 billion valuation. Flush with cash, it blanketed downtown San Francisco with advertisements, bought four companies, quadrupled its staff, started a magazine—and even opened a restaurant. All in just three years.

Today co-founders Henrique Dubugras and Pedro Franceschi are bracing for a harsher reality. Reeling from the coronavirus shutdowns, Brex customers including Airbnb, Outdoor Voices and ClassPass are slashing costs and cutting thousands of jobs. A replay of the 2001 dot-com crash, which wiped out a generation of promising upstarts, could be Brex’s death knell. It has already cut credit limits to reduce its exposure, losing out on revenue it might have generated from these customers and angering some borrowers because it didn’t warn them in advance.

Get access to exclusive coverage
Read deeply reported stories from the largest newsroom in tech.
Latest Articles
 
The Weekend Crypto Venture Capital
The La La Land Life of Venture Capitalist Brianne Kimmel
The La La Land Life of Venture Capitalist Brianne Kimmel
Hi, welcome to your Weekend! It’s peak out-of-office message season in Silicon Valley, and not just because of the Fourth of July weekend. Tech layoffs are popping off everywhere. Venture dealflow has slowed to a crawl. The economic headwinds are fierce and giving certain people super bad feelings. Plus, after two-plus years of pandemic-driven insanity, the people of tech may...
Latest Briefs
 
Hackers Claim to Have Stolen Data on 1 Billion Chinese Residents
TikTok CEO Responds to U.S. Senators’ Questions About User Data Security
Klarna to Raise Cash at $6.5 Billion Valuation in Dramatic Down Round
Stay in the know
Receive a summary of the day's top tech news—distilled into one email.
Access on the go
View stories on our mobile app and tune into our weekly podcast.
Join live video Q&A’s
Deep-dive into topics like startups and autonomous vehicles with our top reporters and other executives.
Enjoy a clutter-free experience
Read without any banner ads.
Microsoft CEO Satya Nadella in 2019
Exclusive Cloud Microsoft
Microsoft Cloud Computing System Suffering From Global Shortage
In March 2020, Microsoft’s Azure cloud buckled under the strain of companies around the world shifting to remote work, causing service outages and forcing some customers to wait to launch and update applications.
Photos Brianne Kimmel. Art by Clark Miller.
The Big Read
Once Upon a Time in Brianne Kimmel’s Hollywood
It was a sunny June day in Los Angeles, and “Crazy Rich Asians” director Jon Chu was setting up a shot .
From left: Brooke Hainey & Keith George, co-founders of Cortina; Bennett Carroccio, co-founder of Canal; Conner Sherline, founder of Disco.
Startups to Watch Startups E-commerce
Three Startups That Help Online Retailers Cut Out Facebook Ads
Direct-to-consumer brands that rely heavily on Facebook and Instagram ads have been reeling ever since Apple’s 2021 privacy changes made it harder and more expensive to land new customers.
Tesla's Fremont factory, in a photo taken in May 2020.
Exclusive Autonomous Vehicles
At Tesla, Returning to the Office Creates New Problems
On the evening of June 8, speaking from Tesla’s factory in Fremont, Calif., Elon Musk addressed a few dozen of the electric car maker’s employees in person, and thousands more in a livestream.
Art by Haejin Park
Opinion
A Girl Killed Herself. It Took TikTok Six Months to Remove Her Account.
Nina is the name I’ll use for the girl who loved my 16-year-old son. Until recently, when he wanted to think about her, he could still find her videos on TikTok, including the ones she posted under a false name while she was a patient in a psychiatric hospital.
Nate CEO Albert Saniger. Art by Mike Sullivan
Exclusive Venture Capital E-commerce
Coatue-Backed Shopping Startup Lays Off 20% of Staff After Exaggerating Tech Capabilities to Potential Investors
Shopping startup Nate, which touted its use of artificial intelligence–powered checkout technology while it was actually relying on overseas workers to power transactions , has laid off at least 30 of its nearly 150 employees, according to an employee who was at an internal meeting to inform the laid-off workers.