Good morning, and welcome to Protocol Fintech. This Monday: how Brex and Ramp’s paths to market diverged, Fireblocks’ plan for crypto payments, and Ripple celebrates its Hinman win.
Diverging and converging
Corporate spend management has entered a period some analysts call “the great convergence.” Companies like Ramp, Brex, Mercury, and Airbase are increasingly moving toward offering all the same services, like charge cards, bill pay, and even B2B "buy now, pay later." But as the market matures, leading companies Brex and Ramp are surrendering their dreams of owning the entire market — even though much of it has yet to be tamed — and moving toward more of a “divide and conquer” mentality.
Brex is still facing an identity crisis. When Brex controversially let its SMB customers go in June, Eric Glyman, the CEO of rival Ramp, told Protocol it was a “very, very good month” for his company.
Brex co-founder Henrique Dubugras said during a talk at the TechCrunch Disrupt conference last week that trying to serve both SMBs and startups was the company’s “biggest mistake.”
But his definition of SMBs feels shaky. Back in June, Dubugras told TechCrunch that Brex’s definition of SMBs was companies without “professional” funding. Yet at Disrupt, Dubugras seemed to contradict that, saying his company was totally down with “boot-strapped” startups too. Generously, you could say the common thread for Brex is serving companies with an accelerated growth strategy.
Ramp, meanwhile, likes customers with money — slower-growing companies that are profitable earlier on. “I think in the startup world, people forget most businesses are profitable,” Glyman said. He argues that small and medium-sized businesses without a moonshot strategy are a strong, sustainable customer base.
Because they’re targeting different customers, their marketing is different. Brex is appealing to startup hype culture, and Ramp to an ethos of humble growth.
Brex’s marketing feels straight out of the year the company was founded, 2017, when WeWork was hosting beer-soaked getaways for employees with Florence + the Machine performing. At LA Tech Week, Brex’s two buzziest events were a media-restricted yacht party and a mansion party serving Captain Morgan and Bombay shots, no chaser, at what was once the influencer-filled Hype House. At TechCrunch Disrupt, attendees were greeted by a giant floating “Brex” sign and a built-out coworking area immediately upon entering the expo floor.
Brex touts customers like DoorDash and Coinbase: the kind of companies its startup clients hope one day to be.
Glyman, meanwhile, described Ramp’s marketing persona as “nice but understated.” Much of the credit card industry’s marketing, historically, has been to play up the wonders of all the extravagant things you can charge on a card, like fancy flights. Glyman said he wants to do the opposite.
“If you can help people go home earlier and spend time with their families and do more things for less, I think that should work,” he said. Ramp wasn’t even on the expo floor at Disrupt.
Even the companies’ founding stories reflect their diverging strategies. As they grow, each company is increasingly reflecting its origins.
Brex’s co-founders set out, from an early age, to found companies that might create major change and make major money. Dubugras and co-founder Pedro Franceschi started innovating as teens in Brazil, speaking the lingo of Silicon Valley as they built their first startups.
Glyman founded a startup specializing in price tracking, Paribus, before starting Ramp. But he was inspired to start it, he said, by a teenage job at retailer Express, after experiencing the difficulties of business banking.
There are other key differences. Ramp has about 400 employees, while Brex had around 1,100 before it laid off 11% of its staff this month. Brex, first to market, courts well-known companies as customers, while Glyman boasts that one of Ramp’s top customers is a hardware business selling “screws and fasteners.” Brex and Ramp’s rivalry is covered like a horse race because it is. The companies have raised around the same amount of money, and are the two biggest startups in corporate spend. They are competing for the same investor checks, employees, and press mentions. But as the companies mature, the founders’ worldviews are pulling them further apart.
Protocol link: https://www.protocol.com/newsletters/protocol-fintech/brex-ramp-culture-clash