These Y Combinator-backed startups want to build the next Brex

Unsurprisingly, fintech startups were well-represented in Y Combinator’s W22 batch, with 35 international companies participating and 25 more tagged as crypto-focused. One trend that caught our eye was that at least four startups – from three different regions – referred to themselves as the “Brex for” their particular geography.

For the unacquainted, Brex is a corporate spend company that recently became a decacorn when it raised $300 million at a $12.3 billion valuation. Brex started its life focused on providing corporate cards aimed mainly at startups and SMBs. It gradually evolved its model with the aim of serving as a one-stop finance shop for these companies.

It competes in a hot and increasingly crowded space that also includes Ramp, Airbase, and TripActions, among others. Notably, the company was started by two Brazilian-born former teen hackers who were just 22 years old when Brex came to be valued at over $1 billion.

The success of Brex has been mirrored by some of its competitors. Ramp has scaled its spend volume massively since launch, also attracting huge sheaves of cash in the process. Airbase has taken a slightly different tack on the space, with a focus on SaaS over transaction incomes, while TripActions pivoted into corporate spend from an original nexus in the business travel market. Meanwhile, Pluto recently raised funding to become the “Ramp for the Middle East.”

That the U.S. market can support so many competing startups provides context on the size of the market up for grabs. Other countries and regions could prove similar, and startups are taking note, with a number around the world looking to join the corporate spend race:

The race to found, fund, and scale regional corporate spend companies in Latin America, Asia, and Africa is somewhat reminiscent of the crypto exchange market. In the world of helping consumers buy and sell crypto, we’ve seen competitors focus on certain areas, likely due in part to local laws making it a regulatory-friendly way of building. TechCrunch is curious if the boom in regional crypto trading players will lead to eventual consolidation as the largest competitors in the space potentially buy smaller firms.

If that bears out, we could see something similar in the corporate spend world in a few years’ time. Or even less, given how rich some leading players are after a wave of nine-figure funding rounds. Those companies could get interested in buying smaller players in other markets quickly if the price was right.

It’s also worth noting that the neobanking space could edge more closely to what the Brex wannabes are building. From the same Y Combinator cohort, Mono is building a neobank for SMBs that could overlap with the software side of the corporate spend world. Nophin is building a neobank for landlords, which could wind up in the spend space, we reckon. You get the idea.

Fintech companies tend to accrete new features as they grow until they all wind up looking a bit like one another. Such has been the case in consumer fintech, most clearly. Perhaps we’ll see the same in the corporate neobanking-corporate spend world? Ramp, for example, is going horizontal as it recently expanded into the travel industry – a space that TripActions was in before moving to general expense management.

Furthermore, many of the Y Combinator-backed Brex-ish companies that are building around the world discussed the value of interchange. This is the same revenue model atop which Brex and Ramp were built, along with Divvy, another U.S. player in the space that exited for billions to In the United States, as the corporate spend market has matured, some players have put an increasing focus on selling software and lowering their reliance on interchange revenues, which can easily be consumed by card rewards, especially in a competitive market for such perks.

For example, Airbase CEO Thejo Kote tells TechCrunch that he sees software as a “higher-quality, more durable” form of revenue.

Beyond consolidation, it will be interesting to see if the companies mentioned above begin to charge for the software that powers their corporate spend service as a way to differentiate themselves from competitors in the crowded cohort.