Inside Brex and Ramp’s AI ambitions

Welcome back to The exchanger, where we look at the hottest fintech news from the previous week. If you’d like to receive The Interchange straight to your inbox every Sunday, visit here register! This week we look at the AI ​​aspirations of spend management companies and the recent growth of a UK fintech.

The ambitions of AI

There was a time when it was joked that every company would become a fintech. But now we have to ask ourselves, will every fintech become an AI company?

This week we reported New Ramp integration with Copilot, Microsoft’s brand of generative AI technologies. The expense management company said that now Microsoft Teams users can use natural language to access Ramp’s intelligent AI assistant from their workspace.

Of course, Ramp is not the first, nor the only, expense management company to leverage AI. Brex in September launched Brex Assistant, a flagship product of Brex AI. In addition to automating the collection of spending information, Brex Assistant can also answer questions that employees traditionally ask their finance teams, such as how much they are allowed to spend per day at an off-site location.

Brex co-CEO and co-founder Henrique Dubugras told TechCrunch+ that he believes “this is just the beginning of AI’s impact on redesigning the experience from the ground up.” employees and users.

Earlier this year, Navan claimed to be the first travel agency to integrate OpenAI and ChatGPT APIs through its infrastructure and product range.

The company said it uses generative AI technology to write, test and fix code with the aim of increasing operational efficiency and reducing overhead. Additionally, through Ava, Navan’s virtual assistant, travel managers are able to personalize recommendations and increase traveler engagement, executives say.

The question, however, is whether leveraging AI not only improves customer experience, but also improves companies’ bottom lines. It’s a valid question, especially considering reports that Brex has seen slower growth (by just 1%, according to the Information) in the third trimester compared to the second.

Although Brex declined to confirm The Information’s report that it reported annualized revenue of $283 million in the third quarter, up from $279 million in the second quarter and annualized revenue of a little less than 200 million dollars, this information must be taken with a grain of salt. Brex likely saw an event-related revenue surge following the Silicon Valley Bank crisis in March. So the fact that its growth slowed in the third quarter seems less dramatic than if a major event that gave it a big surge in activity did not occur. Revenues are still up from last year and, according to the company, so are profits.

A spokesperson told me: “Looking at our year-over-year growth tells a very different story and shows how favorably Brex compares in this market. Year to date, three of Brex’s main revenue drivers (card revenue, deposit spread revenue and Empower revenue) are experiencing significant growth and we have seen growth of over 80%. gross margin over one year. Empower, the company’s software product, has seen revenue growth of nearly 50% this year, according to Brex.

The company, which was last valued at $12 billion, declined to comment on the timing of its IPO, which was rumored to take place sometime in 2025.

In August, Ramp raised $300 million in a funding round co-led by existing backer Thrive Capital and new investor Sands Capital, at a post-money valuation of $5.8 billion. At the time, the company announced that it had surpassed $300 million in annualized revenue.

In the meantime, Navan would have generated $300 million in revenue in 2022. This company (formerly called TripActions) has been publicly valued at $9.2 billion.

In addition to competing with each other, these companies compete with traditional vendors like Concur and Expensify. So it’s no surprise that they’re all leveraging AI to win over customers and make their operations more efficient. -Mary Ann

PS You can listen to Alex Wilhelm and I go deeper on the subject in the latest episode of Equity here:

An update on Wise

I recently spoke with Wise Harsh Sinha, CTO and interim CEO, when he was in town for the grand opening of the British company’s new Austin office. In case you haven’t heard, Wise, known for facilitating cross-border payments, is doing pretty well these days. It recently announced that its revenue increased 22% year over year during its fiscal second quarter, to approximately $314.7 million. It also saw revenue rise 51% year-over-year to around $420 million. The company has more than 5,000 employees worldwide, including 180 in Austin, where it is looking to increase its workforce by 50% over the next 12 months.

With 16 million customers, Wise has been profitable since 2017, well before its 2021 IPO, according to Sinha.

Interestingly, Sinha believes that part of the company’s success is that it “never gave away its product for free.”

“We think charging for your product is something you should do, even if it costs $1,” he told TechCrunch.

Sinha also explained how Wise has grown over time by moving beyond facilitating cross-border transactions to giving users the ability to hold/spend/send funds across the world.

“You can now hold 50 different currencies at Wise, and it basically works as an account product,” Sinha said. “You can pay your salary into it; you can pay your bills there, you can make direct debits. And basically the proposition is for anyone living in multiple currencies and having an international lifestyle.

He also praised the speed of Wise’s offer.

“An example of how we move money around the world: you can make a transfer from us to Australia, and it will arrive in the recipient’s account in less than 20 seconds. I challenge you to do that with ACH today,” Sinha said. “And we did this by building a network that connects directly to local payment systems around the world. And 57% of our payments now on the network are instantaneous, in less than 20 seconds. -Mary Ann

Weekly News

Journalist Manish Singh tells us about the Indian central bank’s decision to implement several measures to slow the growth of consumer spending. The new measures concern unsecured personal loans, credit cards, durable consumer loans granted by banks and non-bank financial companies. This comes as industry analysts report that 39% of retail loans issued in fiscal 2023 went to borrowers who already had five or more active loans. Manish writes that this squeeze will affect startups specializing in lending. He spoke with a fintech founder who said it would reduce growth “a little bit.” Learn more.

Journalist Tage Kene-Okafor writes about Payroll Stack laying off 33 employees across Europe and Dubai as the African payments company shifts its focus to its home continent. Tage reports that the company maintains a presence in Nigeria, Ghana, Kenya and South Africa and is now engaging in private beta testing in Ivory Coast, Egypt and Rwanda as part of its expansion efforts. Learn more.

Editor Frédéric Lardinois broke down the term “FinOps” in an article this week in which tech giants including AWS, Microsoft, Google and Oracle come together to make cloud spending more transparent. This is because each SaaS platform has its own definitions and how they do this. Enter the FinOps Foundation, a movement to create a better framework for how cloud spending is tracked and reported. Learn more.

Editor Sarah Perez is covered Venmo’is a new feature that allows users to split expenses between groups. What’s cool is that for groups, like individual clubs, community organizations, and even roommates, you can get rid of the spreadsheets you’re currently using and track everything via Venmo. Everyone in the group can also manage expenses, so one person isn’t stuck with this role. Sarah points out that this new feature is likely to “cannibalize the user base of single-use apps aimed at organizing group spending, like Split.” Learn more.

TC’s Tage Kene-Okafor reports that Cash Shredder recently announced an enhanced strategic partnership with Visa to drive growth and financial inclusion on the African continent. Having had an established partnership with Visa since 2021 for card issuance, this expanded agreement will allow Chipper to utilize Visa’s extensive experience and investments in more areas of its business, such as licensing and product marketing . “We are delighted to announce our expanded collaboration with Chipper Cash. This strengthens our support for the growing demand for digital financial services in Africa and drives significant impact across the continent,” said Meagan Rabe, Senior Director of Fintech for Visa Sub-Saharan Africa. “We look forward to continuing our work with Chipper Cash to redefine and push the boundaries of financial accessibility and convenience.” » This announcement comes just two months after Chipper announced the launch of Chipper ID, the AI-powered verification and onboarding tool designed specifically for the African continent. Read previous coverage on Chipper Cash here.

Other articles we read:

ICYMI: Plaid officially launches into lending

Inside the war between Square and Cash App at Dorsey’s Block

Businesses love rewards credit cards. This startup makes their launch easier (Discover TechCrunch previous cover of Imprint’s $38 million funding round.)

Americans are being ‘ripped off’ by big banks, says Robinhood CEO. This comes as Robinhood once again increases its Robinhood Gold rate to 5% APY on uninvested cash.

Dwayne Johnson Partners with Acorns to Launch Mighty Oak Debit Card

Financing and Mergers and Acquisitions

As seen on TechCrunch:

Meet Tanda, your friendly neighborhood savings and loan network

Seen elsewhere:

Dwellsy’s Consumer-Driven Rental Search Raises $11.5M Seed Round

Puzzle Secures $30M for Revolutionary AI-Driven Accounting Platform

Happy Money announces new financing

Defacto: the French fintech raises an extension of financing from Citi Ventures (Learn the origin story of Defacto and more in Previous TechCrunch coverage.)

Image credits: Bryce Durbin

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