*By Tanaya Macheel* Brex, the provider of credit cards for early stage venture-backed companies, plans to broaden its customer set this year to include other small businesses, according to CEO and cofounder Henrique Dubugras. "Today, we serve our core market of startups really well. We plan on expanding to other verticals,” Dubugras told Cheddar Tuesday, citing restaurants and consulting firms as examples of potential new customers. "We’re not sure exactly which ones yet. We’re studying a bunch of opportunities but we want more businesses in the U.S. to make use of Brex.” Brex raised $125 million in October with a $1.1 billion valuation ー following a $57 million Series B round it raised in June from investors, among them Peter Thiel and Max Levchi. Ribbit Capital, Y Combinator Continuity, Facebook ($FB) investor Yuri Milner, and former Visa ($V) CEO Carl Pascarella are also investors. The company has been using the funding for its rewards program, which it launched in October to better suit technology startups, which have difficulty obtaining business credit cards as it is ー let alone accessing competitive rewards programs ー given their lack of revenue. The predicament of startups mirrors that of consumers who struggle to get approved for credit cards before they’ve established any credit. The Brex Exclusive card currently competes with the AmEx’s ($AXP) SimplyCash Plus and Business Gold Rewards cards, the Chase Ink Business cards, and Capital One’s ($COF) Spark card. Brex is looking to ramp up its presence at a time when banks appear to be pulling back on consumer rewards ー now that its customers have learned how to game the system and the banks are facing increasing costs on their cards businesses. In December it added a travel redemption pattern to allow its cardholders to book travel directly with their points, rather than just redeem statement credits. Rewards costs grew 15 percent in the third quarter of 2018 from the same period the previous year at all of the top five U.S. banks, according to industry analysts. In the third quarter, Chase cardholders had earned $5.8 billion in rewards they had not yet redeemed ー a 53 percent increase from the end of 2016. "The problem with consumer credit card points is there's this subset of people that like to game their credit cards,” Dubugras said. “They have five, six credit cards and take advantage of the points and multipliers. That forces the bank into a position where they need to cut back but that penalizes people who are just regular credit card users and want their points.” While Brex wants to compete with industry Goliaths and create rewards programs that can out-entice consumers away from Amex and Chase, it’s looking to avoid “gamers” at the outset, according to Dubugras. "As we grow we get more comfortable increasing the rewards program but without this set of credit card gamers it’s healthy to have an aggressive rewards program.” For full interview [click here](https://cheddar.com/videos/credit-card-startup-brex-not-fazed-by-big-banks-scaling-back-rewards-programs).
