Brex’s decision to largely exiting the SME market has taken its customers, market observers and even its competitors by surprise. And while the affected customers are doing their best to remove their assets from the Brex platform, its rivals are targeting the fintech and the market it is leaving behind.
The decacorn’s decision puts a potentially material customer base at stake, meaning Brex’s rivals are likely gearing up to try and attract the adrift accounts.
Marketingwithanoy heard from a number of Brex rivals about this matter, giving us a sense of how the market sees the company’s decision. Of course, while we are talking about competitors, they had quite a bit to say about their own products.
So to avoid being too generous with the competing entities, we’ve divided their observations into two areas: business model comments and customer-related points. We have tried to share only observations that describe the business spending market more broadly and not why one particular company is better than another.
Given how competitive the world of corporate spending has proven (more here, here and here from Marketingwithanoy), Brex has sparked an interesting strategic conversation in this well-funded fintech startup niche. Let’s talk about it.
Kicking the beehive
Interchange earnings usually mean low margins, so their ability to power companies with business expenses has been a matter of debate for some time. Brex and Ramp started offering free services, while Airbase focused more on selling software. Divvy managed to make a huge exit thanks to the discount on card spend alone.
Later, Brex introduced paid software products, and Airbase tried to attack the exchange model by refunding its own exchange earnings to users more or less as cash.