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That’s what you call going out with a whimper. Capital One’s agreement on Thursday to buy Brex, a corporate credit card startup, for $5.15 billion is an uninspiring end to Brex’s life as an independent company. Those with long memories will remember that the nine-year-old Brex’s ambitions were once so grand it claimed to be disrupting American Express—Brex even used the term “BuyAmex” as the Wi-Fi password in one of its offices, we reported in this 2021 deep dive. In that same story, we noted that the founders of Brex and its archrival, Ramp, believed “older institutions such as American Express and Capital One have overlooked the needs of some businesses.” We’d bet Brex executives didn’t use that as a talking point in their discussions with Capital One.
As of last September, Brex was still a quarter or two away from turning a profit, according to comments made by co-founder and CEO Pedro Franceschi to the Financial Times. (Capital One, in contrast, on Thursday reported a fourth-quarter net profit of $2.1 billion.) Brex has had a tough few years, as a 2022 downturn in venture funding curbed spending by its startup customers and forced it to slash costs. (For more, see this story.) Lately things have been looking brighter for the company. We reported last September that Brex had just crossed the $700 million mark in annualized revenue and was growing at more than 45% a year. Even so, the $5.15 billion price, to be paid half in cash and half in stock, is less than half Brex’s peak valuation of $12.3 billion from early 2022. That implies a painful haircut for some of its investors.
Still, the price is better than what Brex shareholders could get by selling on the secondary market, where the company is currently valued at just $3.9 billion, according to Caplight. That’s an important point. Brex had been seen as an IPO contender for this year. It’s possible that its board, having watched the miserable experiences many of last year’s IPOs suffered, decided going public wasn’t the way to maximize value. Consumer fintech Chime, for instance, is currently trading at the same price at which it went public last June.
Franceschi, who is moving to Capital One as part of the agreement, put a brave face on the deal, claiming that “together we’ll maximize founder mode” by combining Brex with Capital One. Yeah, right. For Capital One, Brex is a relatively small acquisition. Remember that last year Capital One bought an older credit card giant, Discover, for $35.3 billion. On a conference call on Thursday, Capital One CEO Richard Fairbank noted that the price paid for Brex amounted to just 3.5% of Capital One’s market capitalization of around $149 billion. Fairbank had plenty of kind words about Brex, citing the value of its technology, among other things. Still, the deal ends Brex’s dream of one day conquering the world.
Bad Jokes at Davos
When those of us in the U.S. awoke to the news that Elon Musk would make a last-minute appearance in Davos on Thursday, we were expecting fireworks! After all, Musk has repeatedly trash-talked the World Economic Forum, which runs the event, including by calling the group an “unelected world government.”
Instead, we got a fireside chat between Musk and BlackRock CEO Larry Fink that was, by Musk standards, very tame. As Musk often does, he gave some rambling proclamations about colonizing Mars and set some very ambitious deadlines for Tesla products, including that the company will start offering Optimus robots for sale by the end of next year.
But instead of attacking the Davos set for being full of out-of-touch liberal elites trying to destroy the world, as he often does on X, Musk seemed eager to impress them by making jokes. At the beginning of the session, Musk joked that the word “peace” in a U.S.-led “Peace Summit” should be spelled “piece” after a “little piece of Greenland, a little piece of Venezuela.” The joke got a laugh from Fink, but silence from the audience.
The biggest guffaw of the evening was in response to an equally lame joke from Fink. When Musk was talking about Star Trek as an inspiration for his companies, Fink interjected that he wished he could be “beamed up to go back to New York” instead of having to fly home (presumably on a private jet). Musk looked like he didn’t understand, so Fink had to repeat the joke, which is when the crowd started to laugh. After a long pause, a confused-looking Musk said: “Yeah.” Not exactly the showdown I’d expected!—Theo Wayt
In Other News
Tesla has started offering rides to customers in a few of its Robotaxi vehicles without backup human supervisors for the first time, the company’s top AI executive said on Thursday. The move in Austin, Texas, is a key initial step toward catching up with Alphabet’s Waymo, which offers autonomous rides to customers without backup humans in more than 2,000 vehicles across six U.S. cities.
Alibaba Group is preparing to list its chipmaking unit T-Head, taking advantage of strong investor demand for companies developing AI processors to reduce China’s reliance on Nvidia, Bloomberg reported.
BitGo, a crypto custodian, became the first crypto company to go public in 2026, opening up 25% on the New York Stock Exchange Thursday.
Intel’s fourth-quarter revenue fell 4%, the chip firm reported Thursday, at the high end of the company’s projections. The result reflected a 7% decline in its largest unit, through which it sells CPUs for use in personal computers and other consumer products. Intel stock, which has more than doubled in recent years, fell 6.6% in after-hours trading.
PayPal said Thursday it would acquire e-commerce startup Cymbio, which produces software that helps brands make their product catalogs available to AI search apps and agents.
Caroline Ellison, former CEO of Alameda Research and ex-girlfriend of Sam Bankman-Fried, was released from jail Wednesday, according to the Federal Bureau of Prisons’ inmate record. Ellison was sentenced to two years in prison after she pleaded guilty to fraud in 2023 for her role in the collapse of FTX.
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