Founders: Henrique Dubugras, Pedro Franceschi (co-CEOs)
Headquarters: San Francisco
Funding: $940 million
Valuation: $7.4 billion
Key technologies: Cloud computing, machine learning
Previous appearances on Disruptor 50 List: 0
It would be hard to find a more quintessentially Silicon Valley company than Brex, a start-up that lends to thousands of other start-ups.
Co-founder Henrique Dubugras was just 14-years-old when he started his first company in Brazil, and later moved to the U.S. to attend Stanford University. Dubugras and Pedro Franceschi dropped out as freshmen after they observed that many fellow entrepreneurs struggled to get corporate charge cards.
While its main product – an unsecured, high-limit charge card for start-ups – exposes it to money-losing companies that could fail in droves, the company manages risk by using real-time data on customers to help make dynamic lending decisions.
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"We assume that 70% of our businesses are going to go out of business every couple of years, because we serve start-ups and most start-ups fail," Dubugras told CNBC in November. "I think that's known and that's okay. All of our credit models and all of our processes are assuming a big amount of churn due to business failure."
After a rocky few months earlier in the pandemic, though, the company started to see strong growth again. Free-flowing venture capital dollars have kept American start-ups flush, and new businesses are being formed at a furious clip, Dubugras said.
That's helped the firm maintain its momentum; Brex said it grew total customers by 80% this year. Indeed, in April, Brex raised $425 million at a valuation of more than $7.4 billion, more than double its previous $3 billion private value.
Brex now offers a software platform for businesses to manage their finances and credit lines. Last year, the company added FDIC insurance to customers' cash accounts, as well as an "Instant Payouts" feature that gives e-commerce merchants early access to sales revenue.
The start-up is a few years away from an initial public offering, Dubugras told CNBC. In the meantime, Dubugras said he no longer tries to convince skeptics that Brex is built to last.
"For a long time, we did our best to counteract that and share about why Brex is a good business, and the only thing that brought us was more competitors," he said. "At this point, I'd rather leave the VC community thinking it's unsustainable."
—Contributed by Hugh Son
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