One year ago, Brex, a corporate card startup and a payments industry poster child for high-speed growth, made a big shift.
Seven years into existence, with tens of thousands of customers and a valuation of $12.3 billion, it “completely changed” its operational model, according to Chief Operating Officer Camilla Matias.
Matias said that the changes – which included cutting 20% of the company’s workforce, eliminating layers of middle management and shifting to a quarterly product release schedule – were a result of leadership saying, “Let’s all go back to really work in the details, and to really understand customer pain points.”
Shortly before the shift, the San Francisco-based firm made headlines for its high cash burn ($17 million monthly, according to The Information).
But now, there are “no worries about runway,” and cash burn is “something that is not top of mind for us,” Matias said during an interview at Fintech Meetup in Las Vegas.
“Of course, we still need to be conscious. We had a bunch of investors that invested in the company and need to be very thoughtful about the decisions that we make,” she said.
Its quarterly product release schedule, a shift from rolling releases, has turned up the heat on focus and prioritization, Matias said.
“The reason why we package it all together is to keep the quality bar very high,” she said.
Rollouts of seemingly smaller features – ones that affect fewer customers, or customers at smaller businesses – could leave room for inadequacies in the product, because fewer eyes are on it, she suggested. But “when you package it all together, everyone is looking at it. It has to be perfect,” Matias said.
“You put a real bar, a real quality bar, to everything that is shipped, even if it looks small. But it's not small, it’s not as small for, like, the bookkeeper that has to support 100 startups,” she said.
Amid ongoing buzz about Brex’s potential initial public offering, Matias said it’s an exciting possibility, but the team isn’t “building Brex toward an IPO.”
“We're building Brex toward being a generational company, a company that really changed the way that CFOs and the whole finance suite operates,” she said. “But if the market allows – if we don't have as many swings in the markets as we had in the last few weeks – hopefully.”
“Stability helps,” Matias said.
CEO Pedro Franceschi told Bloomberg last month that he wants to make sure he can present investors with predictable business before going full speed ahead on an IPO.
“Predictability is crucial, and we want to get really great at that over the next few years,” he said, adding that the firm plans to be cash-flow positive at some point this year.
