With travel nearing a full bounceback from pandemic lows, the sector is drawing attention from financial services firms such as Brex, which is using travel to broaden its relationships with corporate clients.
Brex, which in the past year adjusted its strategy to focus on larger clients and in the past month received billions in deposits from fleeing Silicon Valley Bank customers, on Wednesday announced an expansion to provide more travel services. The events aren't directly related, though travel's pandemic recovery is playing a major role at payment companies looking for areas of growth in a challenging economy.
Brex's core products include payments, lending and other financial services for businesses. It is partnering with Spotnana, a travel-as-a-service platform, to embed travel and entertainment into Brex's existing menu.
The product bundle, which will become part of Brex's Empower spend management platform, covers travel booking, payments and employer-driven management through Brex's dashboard and mobile app. Other services include hotel payments and car rentals in more than 120 countries.
"Most employees find it hard to comply with travel spending rules because they don't know what the policy is," said Henrique Dubugras, cofounder and co-CEO of Brex, adding that the integration automates and consolidates functions such as collecting receipts and memos for flights, hotels and other purchases that occur on business trips in line with employer policy.
The product also provides T&E-related spend management and budgeting for corporate clients. Empower's users include DoorDash, Coinbase, Indeed, SeatGeek and Scale AI. Clients using the bundle for travel expenses at launch include GoGuardian, Miso Robotics, FMS, Satellite Healthcare and others.
"There's a big advantage in having all of this in one place, to have one app that can support travel and other payment functions," Dubugras said.
Travel has been expanding over the past year, though business travel has lagged behind consumer travel and higher prices could cool the recovery. International arrivals for all nations in 2022 were 900 million, or 80% of 2019 levels, according to
"As travel comes back, there will be a need for companies to keep their teams on budget, and to do that in near-real time," Dubugras said.
Other companies are also relying on travel's rebound — or potential risk to that rebound — to expand payment services.
Among technology firms, vacation software provider
"Business travel certainly adds scale to the payments industry, but even more importantly, it is an indicator of being 'back to business' for many industries," said Brian Riley, co-head of payments at Javelin Strategy & Research.
Brex is making its move into travel following its own corporate adjustments that included
"A lot of these customers were already using Brex for cards and payments," Dubugras said. "This was a chance to bring them into a new line of expense within the same user experience."
Brex additionally received a recent
Other
"It doesn't impact our strategy, or the way we work with banks or clients," Dubugras said. "It just brought a lot of new customers."
Brex has deposited about $222 million in SVB since the government said it would back SVB's uninsured deposits, Dubugras said. "We definitely want to be supportive, and they need the deposits."
After the abrupt collapse of Silicon Valley Bank a few weeks ago, it might seem counterintuitive that customers are seeking to move deposits back into the beleaguered bank. There is, however, sense to these recent moves, according to Kathy Park, a Partner at Andra Capital.
"VC-backed portfolio companies, particularly early-stage startups, benefit from underwriting experience that SVB has in providing credit to nascent technology companies with little or no operating history," Park said. "Building up SVB's deposit base will also make the entity more attractive for an acquirer, especially with the bidding process extended for a third time over the past few days."
