Inside Brexit efforts to burn less cash

Welcome to TechCrunch Fintech (formerly The Interchange)! In this edition, I'll discuss the latest round of Brex layoffs, the state of fintech investments in 2023, and more. I may take some time off in the coming weeks, but fear not, TechCrunch Fintech isn't going away. We will be back soon!

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the great story

Everything that goes up has to go down. For expense management startup Brex, this was the case for its employee base. Although interest rates were low, the company saw an increase in business and it was easier to raise venture capital money. Its workforce had grown to about 1,300 before laying off staff in October 2022. As things have come back down to earth, Brex is attempting a restart and announced this week that it cut 282 employees, or nearly 20% of its staff, in a restructuring. . The move came after reports that the company burned $17 million in cash each month during the fourth quarter and is trying to preserve runway.

Analysis of the week

Fintech, oh, fintech. Last year wasn't easy for you. Fintech investors pumped $34.6 billion into startups across 2,055 deals in 2023, a year-over-year drop of –43.8% and –32.4%, respectively, according to Proposal book data. Valuations also fell sharply, with a median of $19.4 million, down –13% from the 2022 median. Exits also plummeted, with just $5.9 billion in exit value generated across 185 deals in 2023, a decrease of –76.1% and –22.3% year-on-year, respectively. But the fourth quarter was good. According CB Perspectivesfintech saw eight new unicorns during the period and equity funding increased by double-digit percentages.

dollars and cents

Bilt Rewards, whose platform aims to allow consumers to earn rewards for rent and everyday neighborhood spending, announced last week that it raised $200 million at a valuation of $3.1 billion. General Catalyst led the financing, which more than doubled the New York-based company's valuation compared to its $150 million raise in October 2022. The rise and jump in valuation is impressive in an environment where mega rounds (deals worth more than $100 million) are few and far between. CB Insights State of the Company Report 2023 found that while mega rounds “were a hallmark of 2021, with more than 350 each quarter. . . In the fourth quarter of 2023, that number fell to just 78, the lowest level since 2017.”

What else are we writing?

Swedish fintech company Klarna announced its first subscription plan, “Klarna Plus,” for $7.99 per month, offering benefits such as no additional service fees when using the Klarna One Time Card, double rewards points, and access to exclusive discounts with popular brands.

TO new list compiled by GGV US highlights 50 fintech startups that venture capitalists find interesting. We also spoke to GGV managing partner Hans Tung about what he sees in the sector today.

PayPal will begin testing some new updates to its service, some of which will take advantage of ai-powered personalization. The company is introducing a new “CashPass” cash back offering called “Smart Receipts,” with personalized recommendations, among other things.