Brex CEO henrique dubglas has now raised over $1 billion over the weekend to fund an emergency bridge credit line it believes will allow startup customers affected by the Silicon Valley Bank collapse to pay their salaries next week. working for Dubugras declined to comment on how much capital has been put into the line of credit so far, but said he is making a string of calls to secure funding.
“We are working with a number of lenders this weekend to basically raise as much money as we can afford,” Dubugras said. To date, more than 500 applicants have applied for more than $1.3 billion in salary loans. “The same people asking for $1 billion have a total deposit of about 10 billion. [at SVB].
Demand is increasing every five minutes, according to the founders. Dubugras said the final closure was “undecided” but said it was “very likely” to close some capitals.
One of the questions is whether the terms of this deal favor the founders or, as one entrepreneur ominously suggested to me today, are there sharks out there?
Brex did not disclose the terms of the deal, but said it did not make a profit on these loans. “That’s where we’re working to find out what the right interest rate is, but think about it this way. There’s not a lot of information right now, and it’s easy to come up with over a billion dollars in a weekend.” Not.” said Duveglas. “So I think we’re just trying to figure out what works for everyone and see if we can create options.”
Another issue is the quality of applicants. As one founder told TechCrunch yesterday, onboarding an influx of people is “the easiest way to get scammed and kicked out of the banking ecosystem.” Dubugras says the quality of SVB’s customer base is “pretty good.”
“Most of the customers we are getting are real startups doing real business with real deposits and connecting their data to SVB accounts that have real money in them,” he said. Told. “We’re verifying that these customers are real customers. That’s not what I’m concerned about.”
“I hope the lesson for the industry is not that banks other than JPMorgan are not safe. I think that would be terrible for our ecosystem and for America,” he added. believes that founders have instead learned to spread risk. “From my point of view, the safest place for your money is not in bank accounts, but in money market funds and cash management accounts. That is why we do this with Brex.”
Dubugras is focused on fundraising, claiming that Brex is ready to raise money and is not looking to profit from desperate founders. Companies need to prove they can pull this off.
As SVB fell, Brex was seen as a formidable contender to profit from money transfers. Sure enough, sources tell TechCrunch that fintech is garnering billions in deposits. The SVB then cut off communications and he was seized by the FDIC hours later.
“The reason we’re doing this is because we want to support the community, which is very important,” says Dubugras. “The business reason we are doing this is to fund these loans and business accounts, and hopefully people will continue to be our customers after that.”
Dubugras isn’t the only technology company executive enlisting others to help fund founders. Another CEO is working on an emergency fundraiser for a climate-focused startup, while another creates a funding source for a historically overlooked and marginalized group of founders. I’m considering how.
If you have any useful tips or clues about what happened in SVB Fallout, you can reach out to Natasha Mascarenhas on Twitter @nmasc_ or Signal (+1 925 271 0912). Anonymous requests will be honored.
