How the Silicon Valley Bank Crisis Boosted Banking Startup Brex

Not many people start multi-billion dollar businesses, and you can count on two hands the number of people who achieve that goal before they’re 30. Henrique Dubugras, 27, CEO of payments platform Brex, and his cofounder Pedro Franceschi, 26, are two of them. The pair came to the U.S from Brazil in 2016—after founding and selling fintech company Pagar.me in Brazil—to attend Stanford University, before dropping out after less than a year to start the company. By 2022, Brex was valued at $12.3 billion, and has now made 10 acquisitions.

Lately, things have been strange in Silicon Valley, even by the standards of fresh-faced finance moguls. High interest rates have slowed the tech industry’s venture capital lifeblood from a torrent to a trickle. Then came the fall of Silicon Valley Bank, which threatened not only the fortunes of high-flying tech companies, but the country’s broader banking system as well. Brex had a front row seat to that drama—the company provides corporate credit cards and expense-management software, and acts as a bank for startups. And as the finances of the tech world teetered, more than $3 billion came gushing into Brex’s accounts.

TIME spoke with Dubugras about Brex, the banking crisis, and the upsides of working in a bad market.

This interview has been condensed and edited for clarity.

How is Brex different from a typical credit card?

So, a good way to think of Brex is that we are a mix of a fintech and a software company. Credit cards were the first version of it. We’re replacing the corporate American Express [account] and Concur [the expense tracking system] in the same place. We get the receipt for you, and submit it for you. That’s good for you because it saves you a ton of time. But it’s also good for businesses, because they have real time information into [their expenses].

The same thing we did with credit cards, we did with banking. You can open a business account in real time. We make payments super easy for you. But at the same time we have software that makes it super easy to pay your bills. So, for example, if you want to pay an invoice you just upload a picture of that invoice and we’re going to automatically find the bank account, we’re going to assign it to the right budget, we’re going to integrate it into your accounting software. We were able to open accounts for customers extremely quickly during the Silicon Valley Bank (SVB) banking crisis, and were able to help them run their payroll super quickly, such that they wouldn’t miss a beat if the Federal Deposit Insurance Corporation (FDIC) didn’t save the day.

Why did those companies come to you during the banking crisis? Why not just open a Chase account or something like that?

Chase would take a week, and you’d have to go to the branch. It happened on a Friday, and payroll was going to run on Monday. Brex was able to open accounts the same day so that they could operate and move their money. Also, we knew startups—we’ve been serving startups for a long time—which is a core SVB customer.

Tell me about that week. What did the banking crisis look like from your end as it was happening?

It was the craziest experience of my professional career. I could say that we knew exactly what was going to happen, and we had everything planned out, but the reality is we were just learning as we went through it. We woke up and we just saw that there was a lot of money coming into our accounts, and we didn’t know exactly why. Later that day, we talked to a bunch of people and we heard what was happening. We thought it was going to be fine. The people most interested in banking that we called said everything was going to be fine. Later, it became clear what was happening, that there was a bank run. And immediately customers are saying, ‘Hey, I don’t know what I’m going to do. I have payroll to run on Monday. I have to pay my bills.’ And we immediately got into action and tried to come up with a payroll loan program to help these businesses make payroll on Monday while their money was stuck. But it was crazy. We had over a billion dollars raised by Sunday, but then the FDIC came and saved the day. I was never so happy to waste work in my life. But I would say we were working 18 to 20-hour days, both days, to make it happen.

How is the broader Silicon Valley slowdown affecting your business?

I don’t know if you know Brazil, but interest rates there go from 2% to 12% on two-year cycles. Inflation is something that we’ve lived with since the 1980s. It’s almost funny to me in the U.S. how astonished [people are]. Coming from Brazil we’ve just seen this so many times. It creates some opportunities and some challenges. On the challenges side, customers are spending less, and we make money when people spend money. So that’s a challenge, but an opportunity, too, because we have this deposits business, and we increase our revenue when interest rates go up on our deposits. And when we go to businesses, [to get them to switch to our service] in a world where only growing revenue matters, they might not think that’s that important. But in a world where controlling cost matters a lot, looking at alternatives that can save money actually becomes really important. So, I would say that the important thing in my view, one, is understanding that these are cycles, they come and go, they’re not here forever. Number two is understanding what the opportunities are, and doubling down on the opportunities. The challenges are there anyway, so just handle them, but focus on what you can get done during this period, and where the good parts are, and double down there.