Financial technology leader Brex is expected to achieve $500 million in revenue, waiting for the right time for an IPO.

The fintech company Brex's latest plan is to achieve $500 million in revenue by 2025, preparing for its initial public offering (IPO) on the US stock market. As one of several fintech startups considering an IPO, Brex CEO Pedro Franceschi stated that before deciding to launch the formal IPO process, the company must ensure it can demonstrate a high level of predictability on the business front to investors. "Choosing to go public is indeed easy, but becoming a public company with low stock price volatility and strong business predictability is challenging," Franceschi revealed in an interview, and said the company plans to achieve positive cash flow by mid-year. "Predictability is a key element, and we will focus on strengthening this core competency in the coming years." Founded by Franceschi and Henrik Dubravko, both graduates of Y Combinator startup incubator, the fintech company has raised approximately $1.5 billion in venture capital during a period of low interest rates following the global outbreak of the COVID-19 pandemic. Its core products include corporate credit cards, business bank accounts, and expense management software. The company's revenue mainly comes from card processing fees, deposit interest, foreign exchange, and fintech software subscription services. According to sources, Brex expects its annual net revenue to surpass $500 million by 2025. Brex uses big data and AI-driven risk models and credit assessments to help businesses that struggle to obtain high credit limits or do not require personal guarantees in traditional banking systems to access the necessary fintech services. Therefore, compared to companies like Stripe and PayPal, Brex focuses more on providing customized corporate credit cards and related cash management and expense management solutions for startups. When Brex reached a valuation peak of $12.3 billion in January 2022, it even planned to "conquer the financial ambitions" of traditional financial giants such as American Express, JPMorgan Chase, and Citigroup. Its competitors mainly include Ramp, valued at $7.65 billion, and Mercury, valued at over $3 billion, which offer similar fintech products or services. Data from private research firm Sacra shows that Ramp's annual net revenue reached $648 million at the end of 2024, while Mercury's annual data reached $500 million. However, Brex faced a development bottleneck under the high pressure of high interest rates caused by the Federal Reserve's continued aggressive rate hikes in 2022-2023. Due to the financing slowdown and debt pressure faced by its main customer base, startups, under high interest rates, as well as the imminent need for profitability, the company's card processing fee revenue scale suffered significantly from customer spending cuts, while maintaining an operational team of about 1,400 people. According to The Information, the company's monthly average cash burn in the fourth quarter of 2023 reached $17 million. Franceschi stated that the company's current cash burn rate has dropped by 82% year-on-year. Through large-scale layoffs, the total number of employees decreased from 1,400 at the end of 2023 to 1,100, a decrease of 21%. "As the company grows in scale, management levels, processes, and performance indicators become increasingly complex, and we easily overlook some core elements that truly create value for customers," Franceschi explained the reform strategy. "We completely removed two management levels, allowing decision-makers to be closer to the essence of the business and customer needs, while focusing on core areas of the business and narrowing the scope." In addition to cost control measures, the fintech company is focused on expanding and winning key clients like the AI company Anthropic, the stock trading platform Robinhood, and the audio technology company Sonos. Data shows that its overall net revenue for enterprise-level business achieved an explosive 80% growth in 2024. 2025 may be the "IPO year" for fintech leaders As human society entered the AI era in 2024, under the leadership of fintech, digital payment application channels have expanded widely, and with the rapid penetration of blockchain technology, the cryptocurrency investment boom following Trump's election victory has heated up, making fintech once again a key focus for Wall Street investment institutions. Especially as Trump nominated many politicians supporting the accelerated development of cryptocurrency to enter the new U.S. government cabinet, the bullish trend in cryptocurrency and blockchain policy expectations has further stimulated the fintech investment frenzy in global financial markets. Analysts at Citigroup project that "fintech" will enter a "dynamic new stage" in 2025, continuing the stable improvement trend of the industry in the fourth quarter of 2024. Although the industry has experienced ups and downs since the outbreak of the COVID-19 pandemic five years ago, enjoying an unprecedented boom during the remote and home office wave, as well as facing the full retreat of the investment frenzy following the "super recovery" of the global real economy after the pandemic, the potential long-term growth drivers for commercial digitalization, modernization, and enabling various industries remain unchanged. Swedish fintech company Klarna, a digital payment processing company, announced in November 2024 that it had secretly submitted an IPO registration statement to the U.S. Securities and Exchange Commission (SEC). Klarna offers exclusive installment payment plans, enabling it to compete with credit card issuers. Its supporters include SoftBank led by Masayoshi Son and the global leading venture capital firm Sequoia Capital. The company completed its latest funding round in 2022, with a valuation of approximately $6.7 billion, but estimates suggest that Klarna's IPO valuation could range between $15 billion and $20 billion. Unlike newly established public companies, Klarna, founded in 2005, has become a global leader in the digital payment industry.One of the core service providers for "buy now, pay later". Klarna provides plugins or integration solutions for major e-commerce platforms such as Shopify, WooCommerce, Magento, etc., allowing merchants to easily access Klarna's payment services.The popular digital banking app service provider Chime has secretly filed for listing in 2024. Chime is an American financial technology company (FinTech) established in 2013, headquartered in San Francisco, USA. It is considered one of the strongest representatives of the "Neobank" or "Challenger Bank" in the United States, primarily providing consumers with zero or low-cost bank accounts and related financial services. As one of the leading digital banks in the United States, Chime has attracted a large number of young users and those who have long been dissatisfied with the fees of traditional banking systems through zero monthly fees, overdraft fees, and a simple mobile app experience. Common fees such as overdraft fees, monthly fees, or minimum balance requirements in traditional banks are all removed or greatly simplified in Chime. While Klarna focuses on "buy now, pay later" (BNPL), Chime focuses on personal digital banking businesses and digital credit building.