Unheard Roots of Brex (Pt.2) 💳

This is Part 2 of our Unheard Roots of Brex series.

Read part 1 to get some context before you read this issue.

Finding a problem 😡

At Y-Combinator, Henrique and Pedro were surrounded by startups that were raising millions from venture capital funds.

If you’re familiar with how YC works, when startups get in they’re enrolled in a 3 month program where they’re lectured by former founders and get office hours with their mentors.

After 3 months, startups present their product to investors around the world and raise funding to scale their businesses.

The duo noticed all these companies struggled to get corporate cards from banks after fundraising.

The banks had no idea how to work with these startups since banks were used to working with traditional businesses.

Building a solution 📱

There was an obvious need for a solution - banks were unable to change due to their bureaucratic structure and startups needed corporate cards.

Henrique and Pedro were already experienced in building fintech companies therefore had founder-market fit with the idea.

The duo had another advantage that is often overlooked - they had the network of Y-Combinator.

We’re talking about one of the most powerful alumni networks in the world.

They were not only able to find their early clients using YC but also get help from other YC partners on navigating regulations and laws.

Growing the idea 📈

To this day, if you look at the largest clients of Brex, they’re all YC backed companies.

Doordash, Coinbase, Airbnb, and Deel.

Lessons from Henrique & Pedro 📚

There are lots of lessons within the first 2 issues we’ve published about the insanely impressive duo.

• Founder market fit is by far the most critical lesson on here for all of you.

Being a right fit for your idea is critical.

Henrique and Pedro set themselves apart from the competition by scraping ideas early on when they knew they wouldn’t be a good fit to build it.

• Building strategic distribution channels

Having access to the YC network was a huge distribution channel for Brex, arguably they would have had a much harder time if they weren’t in YC.

• Find the right partners

Having a good complementary partner is yet another important lesson from the Brex story.

Without Pedro, Henrique arguably wouldn’t have had half of the success he had.