Corporate credit card services company Brex is moving to a single-CEO model, with co-founder Pedro Franceschi serving in that role and fellow co-founder Henrique Dubugras becoming board chair, Dubugras said Wednesday in a post on the company’s website.

Dubugras, who has served as co-CEO alongside Franceschi since Brex launched in 2017, said sharing leadership duties worked well when the company was smaller but became more difficult as the fintech grew.

“I think we’re at a scale where we’re starting to see some of the cracks in the co-CEO model,” Dubugras told TechCrunch on Wednesday. “After talking, we thought this would help the business succeed. We thought this would enable much faster and better decision-making.”

Dubugras cited the company’s goal of launching an initial public offering in 2025 as a factor in the decision, saying “the business requires us to evolve our model.”

Dubugras said he will keep many of his external responsibilities and remains “as committed as ever” to Brex’s mission.

“I’ll still be involved to the extent that the team wants and needs me involved,” he told TechCrunch. “Brex remains my main and only thing.”

Meanwhile, Franceschi will “keep running the business the same way he has been over the last 6 years, just with more agility,” Dubugras wrote in his post.

The looming IPO has served as a catalyst for a number of Brex’s recent decisions, including its move in January to cut 20% of its workforce.

“The changes today are driven by a desire to make Brex more agile and accelerate our path to profitability, building on the growth we had in 2023,” a spokesperson for Brex told TechCrunch at the time. “We grew our revenue 35%+ in 2023 while gross profit increased by 75%. This reduction in force puts us on a clear path towards profitability.”

Franceschi on Wednesday told the outlet that Brex has cut its cash burn in half over the past year and has seen increased revenue growth “without increasing fixed costs.”

January’s layoffs “contributed to a lot of the savings,” Franceschi said, adding that he doesn’t anticipate further headcount reductions.

“The biggest benefit after the layoff was not just the cost savings,” he said. “It was the way in which the company operates.”

Franceschi said he expects Brex will be cash-flow positive next year.

“So, if that happens in 2025, [an IPO] will be soon after. But we need to get there first,” he told TechCrunch.

Wednesday’s “role definition” — as Dubugras calls the CEO split in his post — is far from the only movement Brex has seen in its C-suite over the past year. The company named Meta veteran Karandeep Anand, originally hired as Brex’s chief product officer, as its first president in November.

Concurrent with the January layoffs, Brex promoted Camilla Morais to chief operating officer to replace Michael Tannenbaum, who was later named CEO of Figure. Additionally, Brex’s chief technology officer, Cosmin Nicolaescu, is set to move to an advisory position with the company this summer.

In his post Wednesday, Dubugras said the “upside” to the long-running co-CEO setup with Franceschi was “that we had twice as much time as other CEOs.”

But the most lasting takeaway, he said, is the friendship between the two.

“We were fortunate enough to find each other at a very young age, and grow together — professionally and personally — over the past decade,” Dubugras wrote.

“We built a company together,” he said, referring to their first entrepreneurial effort, Pagar.me in Brazil in 2012.

“[We] moved to the US together for college, built another company together, lived together, built a friend group together, and Pedro even officiated my wedding last year,” Dubugras said. “This transition is just another iteration of what we started 12 years ago, and I hope it continues for the next 12 years to come. I couldn’t have asked for a better friend and partner with whom to build Brex, and to share the most important moments of our lives together.”

By Dan Ennis on June 14, 2024
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