Capital One announced on Thursday that it has agreed to acquire payments startup Brex for $5.15 billion, marking the latest high-profile acquisition by Capital One founder and chief executive Richard Fairbank.
The transaction, disclosed in Capital One’s fourth-quarter earnings statement, will be financed through a mix of 50 per cent cash and 50 per cent stock, the bank said. Brex was last valued at $12.3 billion, underscoring a valuation decline of more than 50 per cent amid broader pressures facing the fintech sector.
Shares of Capital One fell about 3 per cent following the announcement.
The acquisition follows Capital One’s $35 billion purchase of Discover Financial last year, a landmark deal that gave the lender access to a major payments network and significantly expanded its footprint in the credit card industry.
Strategic Push Into Business Payments
Fairbank said the Brex deal aligns with Capital One’s long-term strategy to strengthen its position in business payments and financial technology.
“Since our founding, we set out to build a payments company at the frontier of the technology revolution,” Fairbank said in a statement. “Acquiring Brex accelerates this journey, particularly in the business payments marketplace.”
He added that Brex has distinguished itself by combining corporate cards, banking services, and spend management software into a vertically integrated platform, a model Capital One increasingly viewed as critical to future growth.
Founded by Pedro Franceschi and Henrique Dubugras, Brex initially gained traction by offering credit cards and lending products tailored to startups during a period of ultra-low interest rates. Over time, the company expanded beyond the technology sector to serve larger and more established businesses.
Today, Brex counts clients such as Robinhood, Zoom, and Anthropic among its customer base.
Fintech Valuations Under Pressure
The sharp drop in Brex’s valuation highlights the challenges facing fintech firms as higher interest rates, tighter funding conditions, and increased competition reshape the sector. Many startups that surged during the venture capital boom of the early 2020s have since been forced to recalibrate growth expectations and business models.
Despite those headwinds, Brex’s leadership said the deal reflects a strategic decision rather than financial necessity.
“We didn’t have to pursue this acquisition, our growth was incredibly strong,” Franceschi said in an interview, adding that combining Brex’s technology with Capital One’s scale and resources would accelerate expansion more quickly than remaining independent.
Capital One, which has offered business credit cards for decades, has increasingly focused on digital-first platforms and integrated payment solutions as competition intensifies across the financial services industry.
