Amid the flurry of news this week surrounding President Trump’s speech at the World Economic Forum in Davos, Switzerland, an announcement by the nation’s third-largest credit card issuer, $661 billion (assets) Capital One, that it was spending $5.2 billion on a fintech named Brex seemed to garner little attention.
However, Capital One’s billionaire CEO and cofounder Richard Fairbank is renowned as one of banking’s smartest strategists, and this latest acquisition, which is priced well below Brex’s $12 billion valuation from 2022, could prove to be a game-changer in two different areas.
Founded in 2017, Brex offers corporate credit cards, employee spend-management tools and business bank accounts to 35,000 customers, many of them technology firms like Coinbase and DoorDash, as well as startups that often were rejected by American Express. The acquisition, made half in cash and half in stock, gives Capital One a giant inroad into technology companies, from which it can expand its credit card balances. Though not yet profitable, Brex is growing like gangbusters and has reported a gross revenue run-rate of $700 million per year.
Brex will help the credit card giant expand further into business payments and small business banking, Capital One cofounder and CEO Rich Fairbank said on the company’s fourth quarter earnings call yesterday. He noted the payments challenges facing businesses, including collecting invoices, deciding how to pay, managing approvals and tracking workers’ spending. “In 2017, Brex invented the integrated combination of business credit cards, spend management software and banking together in a single platform,” he said.
He added that, as businesses move away from cash and checks, the business-card market is growing at 9% annually. Fairbank said about half of the $2 trillion in annual business-card spend is “corporate liability, where the business entity is responsible for making payments on the card,” instead of the business owner being responsible. Fairbank said Capital One doesn’t have as much traction in corporate liability and thinks Brex will help fill that gap. He called out some of Brex’s large tech customers, including Anthropic, Cloudflare, Robinhood, Scale AI, TikTok and Toast.
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Another market Brex will help Capital One expand into: small business banking. Historically, Capital One’s small business offerings have been “mostly a local offering in our branch footprint” based on banks that cover 18% of the U.S., Fairbanks said.
Digital-first business banks have become a hot area of fintech. Beyond Brex, companies like Ramp, Mercury and Relay continue to grow quickly. Fairbank said Capital One previously “didn’t have enough scale in our small business [customer set]” to invest heavily into new technology to support small business banking, but the Brex purchase brings better technology.
Sanjay Sakhrani, a research analyst at KBW, said Wall Street has long admired American Express’ position in having a card-processing network and large businesses in personal and corporate cards. “This deal, combined with the Discover acquisition, gives them most of the pieces they need to replicate a very similar model,” says Sakhrani. He thinks they can now become “more of a vertically integrated operating system to small and medium-sized businesses and commercial clients.”
The other potential game-changer from the Brex acquisition could come from its underlying technology. Few veteran bank CEOs are as attuned to tech infrastructure as Fairbank, and he stressed Brex’s expertise on the earnings call.
“How many times do I talk about building a tech stack from the bottom of the tech stack up? That is what we’ve done at Capital One. It is a very long and lonely journey to do it … but the benefits are multiplicative.” Without specifying details, he said Brex’s technology won’t just help his cards business, “but also all aspects of the business side of Capital One.”
Sakhrani adds that Brex’s technology is “very AI forward” and “will enable Capital One to compete effectively with other fintechs.”
Of course, Capital One plans to use its vast resources to try to accelerate Brex’s growth, including its massive marketing machine and targeting capabilities, data scale, big customer base and large balance sheet.
Brex’s exit will likely provide an excellent return for its earliest investors, including Ribbit Capital and YCombinator, and a much lower return for its later investors. It has raised $1.3 billion in equity financing since it was founded and was valued at $12 billion in 2022. Its roughly $700 million in annualized gross revenue implies Capital One bought it for a multiple of about seven times its sales. Brex’s fintech rival Ramp was founded in 2019 and said it was bringing in $1 billion in annualized gross revenue last September. Ramp was valued at $32 billion in a November 2025 fundraise, implying a much higher revenue multiple.
Capital One’s stock fell 7% on Friday after the prior’s day earnings call. Sakhrani attributes the drop to higher expenses in the fourth quarter and the fact that “a deal like Brex can drive up investments in the near-term.” But he thinks Capital One will still be able to hit its goal of faster earnings growth in 2027.
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