The Bill Comes Due
On Brex, Ramp, and exits that actually clear
Brex sold to Capital One for $5.15 billion today. Down from $12.3 billion at peak.
My timeline is calling it a disappointment. Ramp has been crowned the winner for a ~year now. $32 billion valuation, $1 billion “ARR”, all the buzz. Brex feels like a failure.
But Brex just put $5.15 billion in the bank. Real money. Everyone knows I’m a Ramp fan boy and Ramp’s $32 billion could absolutely be right. But we won’t really know until it clears.
Instacart raised at $39 billion. IPO’d at $10 billion. Klarna went from $45.6 billion to $6.7 billion in a single round. 85% haircut. The right corrections but TechCrunch called them failures.
Good reminder that the private numbers are not realized. We just like how it feels.
In this hype cycle, I am seeing founders pop champagne over term sheets that valued them at $2 billion on $5 million ARR. This high will last about a week. Then at the sign of the first downturn, the board will expect you to grow into it.
Meanwhile the stuff that actually matters - retention, margins, whether customers would notice if you disappeared - none of that makes the front page. Growth without retention is just a more expensive way to die.
Public markets don’t care about your Series D press release. They run the numbers. They look at churn. They discount the story and price the business. Sometimes brutally.
That leads to founders who are stuck. Raised at that $2 billion valuation. Can’t raise a down round because the optics are brutal. Can’t sell because the markup was fake. Can’t IPO because public investors would laugh. So they sit there, zombie companies with zombie cap tables, waiting for a market that’s never coming back. Or sell under the pref stack.
The VCs who marked those deals up have moved on to shinier objects. Still asking you to move fast and grow with abandon - while the founders are trapped.
Brex didn’t get trapped. Pedro and Henrique built something Capital One wanted to buy. They took the money. Their early investors made a fortune. Their employees got liquid.
So massive congrats to Brex on achieving a top 0.1% exit. If this is a disappointment, then I wish I get this kind of disappointment every day.
"Can’t raise a down round because the optics are brutal. Can’t sell because the markup was fake. Can’t IPO because public investors would laugh."
Are we talking about Thinking Machines Lab?
Or Unconventional AI?
Or Humans&?
For the record, each raised huge money based on the charisma of the founding teams, and vague promise of [something AI; well, actually, nevermind].
It was $2B at $12B valuation, $475M at $4.5B valuation, and $480M at $4.5B valuation, respectively. Absurd by any standards.
Let's just wait till brutal optics, fake markup realization, and laughable IPO dreams kick in.
Unless the founding team starts jumping ship. Oh, wait, that ship has sailed (pun intended).
I think the exit price v. valuation is more of a commentary of Wall Street's valuations v SV's valuations. And Wall Street plays with real money.