Inside Brex's efforts to burn less cash

Welcome to TechCrunch Fintech (formerly The Interchange)! In this edition, I’m going to look at Brex’s latest round of layoffs, the state of fintech investing in 2023 and more! I may be taking some time off in coming weeks but never fear, TechCrunch Fintech isn’t going away. We’ll be back soon!

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The big story

What goes up must come down. For spend management startup Brex, this was the case for its employee headcount. While interest rates were low, the company saw a bump in business and VC money was easier to come by. Its headcount had swelled to about 1,300 before it laid off staff in October of 2022. As things have come down to earth, Brex is attempting a reset, announcing this week it cut 282 employees, or nearly 20% of its staff, in a restructuring. The move came after reports the company burned $ 17 million in cash each month during the fourth quarter and that it is trying to preserve runway.

Analysis of the week

Fintech, oh, fintech. Last year wasn’t easy on you. Fintech investors injected $ 34.6 billion in startups across 2,055 deals in 2023, a –43.8% and –32.4% YoY drop, respectively, according to PitchBook data. Valuations also mostly dropped, with the median of $ 19.4 million, down –13% from 2022’s median. Exits also took a dive, with just $ 5.9 billion in exit value generated across 185 deals in 2023, a decrease of –76.1% and –22.3% YoY, respectively. But Q4 was a good one. According to CB Insights, fintech saw eight new unicorns during the period and equity funding increase by double-digit percentages.

Dollars and cents

Bilt Rewards, whose platform aims to allow consumers to earn rewards on rent and daily neighborhood spend, announced last week that it raised $ 200 million at a $ 3.1 billion valuation. General Catalyst led the financing, which more than doubled the New York–based company’s valuation compared to its $ 150 million October 2022 raise. The raise and valuation jump are impressive in an environment were mega-rounds (deals worth over $ 100 million) are few and far between. CB Insights’ State of Venture Report 2023 found that while mega-rounds “were a hallmark of 2021, with 350+ occurring each quarter . . . in Q4’23, that figure fell to just 78 — the lowest level since 2017.”

What else we’re writing

Swedish fintech company Klarna announced its first subscription plan, “Klarna Plus,” for $ 7.99 per month, featuring benefits like no added service fees when using Klarna’s One Time Card, double rewards points and access to exclusive discounts with popular brands.

A new list compiled by GGV US highlights 50 fintech startups venture capitalists think are hot stuff. We also spoke to GGV managing partner Hans Tung about what he’s seeing in the sector today.

PayPal will begin piloting a few new upcoming updates to its service, some of which will leverage AI-driven personalization. The company is introducing a new “CashPass” cash-back offering called “Smart Receipts,” with personalized recommendations, among other things.