Amid Brex’s efforts to burn less cash

Welcome to TechCrunch Fintech (formerly The Interchange)! In this edition, I’ll look at the latest round of Brex layoffs, the state of fintech investment in 2023, and more! I may be taking some time off in the coming weeks, but fear not, TechCrunch Fintech isn’t going away. We will be back soon!

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The big story

What goes up comes down. For expense management startup Brex, that was true of its headcount. While interest rates were low, the company saw a surge in business and VC money was easier to find. Its headcount had grown to about 1,300 before it laid off staff in October 2022. As things have come down to earth, Brex is attempting a turnaround, announcing this week that it is cutting 282 employees, or nearly 20% of its workforce, in a restructuring. The move came after reports that the company burned through $17 million in cash each month during the fourth quarter and is struggling to maintain runway.

Analysis of the week

Fintech, oh, fintech. Last year was not easy for you. Fintech investors raised $34.6 billion in startups across 2,055 deals in 2023, down -43.8% and -32.4% year-over-year, respectively, according to PitchBook data. Valuations were also mostly down, with a median of $19.4 million, down -13% from the 2022 median. Exits also took a dive, with just $5.9 billion in exit value created in 185 deals in 2023, down -76.1% and -22.3% year-on-year, respectively. But Q4 was good. According CB Insightsfintech saw eight new unicorns during the period and equity funding grew by double digits.

Dollars and cents

Bilt Rewards, whose platform aims to let consumers earn rewards for rent and everyday neighborhood spending, announced last week that it raised $200 million at a $3.1 billion valuation. General Catalyst led the funding, which more than doubled the New York-based company’s valuation compared to when it raised $150 million in October 2022. The increase and jump in valuation is impressive in an environment where large rounds (deals of over $100 million) are minimal. CB Insights State of Business 2023 Report found that while large rounds “were a feature of 2021, with 350+ taking place each quarter . . . in 4Q13, that number fell to just 78 – the lowest level since 2017.”

What else are we writing?

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ONE new list compiled by GGV US highlights 50 fintech startups that entrepreneur entrepreneurs think are hot stuff. We also spoke to GGV CEO Hans Tung about what he sees in the sector today.

PayPal will be piloting some new upcoming updates to its service, some of which will leverage AI-powered personalization. The company is introducing a new ‘CashPass’ cashback offer called ‘Smart Receipts’, with personalized recommendations, among others.