Here’s why Brex just paid $90 million for 10-person software startup Pry Financials – TechCrunch

Consistent with its April 13 announcement that it’s getting a “big push” into software, Brex has acquired Y Combinator-backed Pry Financials for $90 million, the company told TechCrunch exclusively.

Founded in 2019, San Francisco-based financial planning software startup Pry raised $4.2 million in venture funding last year in a seed funding round. Investors include Y Combinator, Global Founders Capital, and Pioneer Fund, among others. The company’s software targets seeds at Series B companies.

Originally, Brex was a startup-focused startup. Specifically, it provided corporate cards aimed primarily at startups and SMEs. Over time, Brex has gradually evolved its model with the aim of serving as a “financial operating system” for businesses of all sizes.

Its acquisition of Pry not only reflects Brex’s new focus on offering strong software products, but also its continued commitment to early stage startups – the demographic that was the company’s target customer in its early days. Today, Brex says it still has “tens of thousands” of startup customers.

Brex CEO and co-founder Henrique Dubugras says Pry’s software gives founders the ability to directly connect their company’s bank accounts or integrate with QuickBooks or Xero to “immediately gain insight into workflows.” cash flow, burn rate, and track of their startups, track critical financial metrics, create a forward-looking financial plan, and model different future outcomes.

Neither company would share Pry’s actual revenue numbers, and the startup only said it grew about 30% month-over-month since its public launch in early March 2021.

Paying $90 million for a 10-person company that has raised just over $4 million in its lifetime is a bold move for Brex and a great result for Pry’s founders and investors. It is also the largest fintech acquisition to date. Brex made a total of nine acquisitions, but the majority were acquisitions. Its purchase of Pry, and last year’s $50 million purchase of Israeli startup Weav, were more about acquiring the company’s technology and products.

Dubugras told TechCrunch that he reached out to the company after participating in Y Combinator’s Winter 2021 cohort. But what really drove fintech to take over the company was the overwhelming endorsement of startups on its Customer Advisory Board. Eight out of 10 founders on this board said they used Pry’s software and it was “amazing.”

“Pry’s software makes it incredibly easy for a founder to plan and better understand their business, how their cash flow will change,” Dubugras told TechCrunch. “It’s an Excel-like product to connect all their data and to build a model and a budget, which is also very useful for investors.”

Dubugras said Brex values ​​the startup less on its own metrics and more on the value it believes it can generate for Brex by cross-selling to its existing customer base.

“We already have 160 joint customers, and that hasn’t even been a lot of marketing or selling,” he added. “It was a strong fit with the product market.”

The 10 employees were integrated into the Brex.

Andy Su, co-founder and CEO of Pry, remembers when Dubugras approached him after seeing his company exhibit at YC Demo Day.

“He contacted and we had a tete-a-tete in May. He told me he really liked what Pry was doing and thought it could work really well within Brex,” Su recalled. “And I thought he was just nice, you know?” And just encourage another founding colleague. But it turns out he really meant it.

In its early days, Pry primarily sold to YC businesses, according to Su. But as the company has grown, YC companies now account for around 30% of its customers.

In Su’s opinion, what sets Pry’s software apart is “the comprehensiveness of the tool.”

“There are many point solutions out there,” he told TechCrunch. “But ours is one of the first to have a budgeting element, a modeling plan, and a hiring tool all in one platform so founders can leave their Excel spreadsheets behind. .”

Su had hoped for a release like this one day, but “definitely not so soon”.

“It’s an exciting result for us,” he said.

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