A corporate credit card has been launched for funded start-ups which struggle to qualify for accounts due to a lack of credit history.
San Francisco-based Brex has spent the last year working with customers on the most effective way of navigating financial and regulatory hurdles that typically prevent early stage companies from credit card services.
It allows growing companies to get instant approval on cards that offer high limits and don’t require any kind of personal guarantee.
It already has more than 1,000 customers and is now open to start-ups across the US. A spokeswoman for the firm told BusinessCloud that it is “currently focused on the US market” although she did not rule out future expansion to the UK.
“Start-ups that have raised millions and are poised for hyper-growth can’t get slowed down hassling with banks requiring personal guarantees and offering meagre credit limits,” said co-founder and CEO Henrique Dubugras.
“Traditional credit models look at how much a company can pay back in a year based on profits, often disqualifying start-ups. We rebuilt the financial services tech stack from the ground up and created a new kind of card to specifically meet the needs of start-ups.”
The FinTech firm has secured $57 million in Series B investment. The round was led by Y Combinator Continuity alongside investment from PayPal founders Peter Thiel and Max Levchin, Facebook investor Yuri Milner, financial services VC Ribbit Capital and former Visa CEO Carl Pascarella.
Y Combinator Continuity partner Dalton Caldwell said: “As a start-up founder, you have so many things going on, and the last thing you want to worry about is finding a quick and easy payments solution for company expenses, let alone personally guaranteeing a card or trying to find an expense management system that works.”