Capital One to Buy Brex for $5.15 Billion, Expanding Further Into Business Payments Software

Capital One Financial Corp. is buying corporate-card and spend-management startup Brex Inc. in a $5.15 billion cash-and-stock deal, a move that hands the banking giant one of Silicon Valley’s best-known fintech firms at less than half its peak private valuation and extends its rapid expansion across the payments industry.

Deal follows Discover acquisition

The agreement, announced Jan. 22, comes less than a year after Capital One closed its $35.3 billion acquisition of Discover Financial Services. With Brex, the McLean, Virginia-based lender is moving beyond issuing cards and running a network into controlling the software that companies use to manage employee spending, pay bills and analyze their finances.

Capital One said it expects the Brex transaction to close in the middle of 2026, subject to regulatory approvals and customary closing conditions. Brex co-founder and Chief Executive Pedro Franceschi will continue to lead the business inside Capital One after the deal is completed.

In a statement announcing the agreement, Capital One Chairman and CEO Richard Fairbank cast the purchase as part of a longer-term technology strategy rather than a simple product add-on.

“We set out many years ago to build a payments company at the frontier of the technology revolution,” Fairbank said, adding that acquiring Brex “accelerates this journey, especially in the business payments marketplace.”

Fairbank praised Brex for building what he called a “vertically integrated platform from the bottom of the tech stack to the top,” describing that as “the rarest of journeys for a fintech.”

Terms: cash and stock

Under the terms filed in a Form 8-K with the Securities and Exchange Commission, Capital One will pay about $2.75 billion in cash and issue roughly 10.6 million shares of its common stock to Brex’s shareholders, for total consideration of $5.15 billion, subject to standard adjustments. The stock portion will be issued in a private offering exempt from registration under Section 4(a)(2) of the Securities Act of 1933.

What Brex brings

Brex, founded in 2017 by Brazilian entrepreneurs Franceschi and Henrique Dubugras, built its brand by offering corporate charge cards and cash-management accounts tailored to venture-backed startups and fast-growing technology companies. It later expanded into expense management, bill payment, travel and reimbursements, positioning its platform as an “AI-native” operating system for corporate finances.

More than 25,000 companies use Brex’s products, including DoorDash, TikTok, Anthropic, Robinhood Markets, CrowdStrike, Zoom Video Communications, Plaid and the Boston Celtics, according to the companies. Industry analysts estimate Brex generated roughly $700 million in annualized revenue in 2025 and oversaw about $13 billion in commercial deposits through its banking partners.

Franceschi said the sale marks a new stage for the company after nearly a decade of rapid growth.

“When we started Brex in 2017, we saw an opportunity to be a category creator – bringing together financial services and software into one AI-native platform,” he said in the joint announcement. Joining Capital One, he said, will “supercharge our next chapter” by combining Brex’s software with Capital One’s “massive scale, sophisticated underwriting, and compelling brand.”

Strategic rationale and competitive impact

For Capital One, Brex extends a push into business payments that already includes its long-running Spark line of small-business credit cards. The bank reported $669 billion in assets and $475.8 billion in deposits as of Dec. 31, 2025, and has marketed itself as the only major U.S. bank to have fully migrated its core systems to the public cloud.

With Discover, Capital One gained a global card network and a broader consumer franchise. Adding Brex brings the software used by finance teams to issue cards to employees, set spending policies, capture receipts and feed transactions into accounting systems.

Analysts say that combination positions Capital One to compete more directly with American Express Co. in the corporate-card and travel-and-expense market, while also putting pressure on software-focused rivals such as Ramp, Navan, Airbase and Bill Holdings.

It also underlines how some of the most prominent fintech startups of the past decade are choosing to sell to established financial institutions rather than go public at their peak valuations.

Fintech valuations and Brex’s shift

Brex raised more than $1.5 billion in venture funding and was valued at about $12.3 billion in early 2022, during a period of low interest rates and strong investor appetite for growth-focused technology firms. Since then, higher borrowing costs and a slower IPO market have pushed many late-stage companies to cut costs, delay listings or seek strategic buyers.

Brex went through multiple rounds of layoffs in 2022 and 2024 and narrowed its target market to venture-backed startups and mid-market enterprises. In 2022, it notified tens of thousands of small-business customers without institutional backing that they would lose access to its services, citing a decision to concentrate on larger and professionally funded firms. The move drew criticism from some entrepreneurs and Main Street businesses that had relied on the platform.

More recently, Brex had signaled interest in a public offering and secured regulatory approval to expand into the United Kingdom and Europe, describing a multibillion-dollar revenue opportunity there. The decision to sell to Capital One instead suggests investors and executives saw greater certainty in an acquisition than in navigating volatile public markets.

Deposits, integration risks and regulators

For Capital One, the acquisition brings not only technology and customers but also a significant pool of business deposits that can help lower its overall funding costs. Brex’s AI-driven tools for analyzing and controlling spend may also be deployed more broadly across Capital One’s commercial banking and small-business segments.

At the same time, the lender must convince shareholders and regulators that it can integrate another large transaction while managing expenses and risk. After reporting fourth-quarter earnings and announcing the Brex deal, Capital One’s shares fell roughly 6% to 7%, making it one of the worst performers in the S&P 500 that day. Analysts pointed to an earnings miss, higher spending and concerns about the costs of integrating Discover and Brex.

Capital One has said the Brex transaction is subject to “customary regulatory approvals,” without naming specific agencies. In previous large bank deals, including its Discover acquisition, the Federal Reserve, the Office of the Comptroller of the Currency and state banking regulators reviewed the transactions. The Department of Justice typically examines potential anticompetitive effects in card issuing, merchant acquiring and related markets.

The Brex purchase is smaller than the Discover deal in dollar terms, but together the transactions give Capital One a larger share of credit-card lending, a proprietary card network and an enterprise software platform used to manage corporate spend. Consumer advocates and some lawmakers previously raised concerns about consolidation in card markets after the Discover announcement, and regulators could scrutinize how the Brex integration affects competition in corporate cards and business-payments software.

Open questions: partnerships and customer reaction

One open question is how Brex’s existing bank partnerships will be handled once it is owned by Capital One. In December 2025, Brex announced a multi-year agreement with Fifth Third Bancorp under which Fifth Third’s “Commercial Card powered by Brex” would use Brex’s embedded payments infrastructure. Neither Capital One nor Brex has publicly addressed whether that arrangement will continue in its current form.

Another issue will be how existing Brex customers react to bank ownership. Some high-growth companies may welcome the added stability and regulatory oversight that come with a large balance sheet. Others that chose Brex as an alternative to traditional lenders may prefer to diversify with independent platforms.

For now, both companies are emphasizing continuity. Capital One said Brex will operate as a distinct business within the bank’s corporate structure, with Franceschi and his team expected to remain in place. The merger agreement filed with the SEC includes standard warnings that integration could be more difficult or costly than expected and that anticipated benefits might not be fully realized.

As the deal moves through approvals, it will serve as a test of whether a large regulated bank can absorb a high-growth fintech without slowing its product development or alienating its core users — and whether the once-separate worlds of startup finance and big-bank infrastructure are, in practice, converging into a single, tightly controlled payments ecosystem.