Brex statement last week that stop serving small and medium businesses shocked – and upset – many with its suddenness and delivery.
The fintech decacorn, which began life as a card provider for startups and SMEs, began notifying customers last week that they would be off the Brex service from August 15th. Earlier this year, Brex announced the transition to corporate customer service and the “big push” in software so from that point of view the news was not entirely shocking.
However, many people didn’t know who it would affect, and CEO and co-founder Enrique Dubugras told TechCrunch June 17 that it will affect small and medium businesses and companies that have not received “professional funding”, such as venture capital. Some venture backed clients were notified that they would be affected but were later reinstated.
In the post, Francesca expressed regret over “poor job of explaining this decision, which undermined some of the valuable trust” that Brex has built over the years.
He added: “We have not communicated clearly who qualifies as a Brex customer going forward, which has created confusion about which companies Brex will continue to serve.”
And later he said:
The announcement last week was an incredibly disappointing moment for Brex. I signed an email sent that lacked the transparency our clients deserve. As someone whose father was a small business owner, the way we communicated this decision had a profound effect on me.
Franceschi went on to explain exactly who this would affect, noting the following criteria that a company must meet in order to remain a Brex client:
- Received investments in shares of any amount (accelerator, angel, venture capital or web3 token);
- Income over $1 million per year;
- more than 50 employees;
- More than 500 thousand dollars in cash;
- Tech startups that are on track to meet the above criteria and have been recommended by an existing client or partner.
Is the announcement too late to at least partly offset the blow to Brex’s reputation? I think we will see.
Credit: techcrunch.com /