When Henrique Dubugras started getting legal notices about a video game that the then 14-year-old had hacked together and put on the internet for free – his own version of a popular Korean online roll playing game – his parents were not pleased.
"I got these legal notifications saying I was breaking some sort of patents because of this game," Dubugras says. "I really didn't know what patents were, but my mom got, like, super upset and told me to shut everything [down]."
"But because of this game, I learned how to code and that changed the rest of my life."
Today, Dubugras, 25, is the co-founder and CEO of corporate credit card start-up Brex, which valued at roughly $7.4 billion. Dubugras and his co-founder, Pedro Franceschi, 24, are reportedly each worth $400 million.
And Brex isn't even the first successful company they've started. In 2016 they sold their first payments company, Pagar.me, for "tens of millions," Dubugras said in 2018. The company is now part of Stone, a $19 billion start-up, and one of the largest payments companies in Brazil, where the two co-founders grew up.
But Brex is their baby. Today the company boasts 10,000 corporate customers, including start-ups like Boxed and Outdoor Voices. And with its recent $425 million fundraising round, led by investment firm Tiger Global, Brex has now raised more than $940 million from investors that also include Y Combinator and PayPal co-founders Max Levchin and Peter Thiel, along with more than $300 million in credit lines from Barclays and Credit Suisse.
Dubugras wants Brex to keep growing to provide corporate credit cards to more and more companies all over the world, so that "every growing company can realize their full potential," he says.
But most importantly, he says he wants to stick with Brex for the long haul.
"Sometimes people call us serial entrepreneurs," Dubugras says of himself and Franceschi. "We never wanted to be serial entrepreneurs. We just wanted to build one company and work on it for, like, 30 years. That's our dream and it's what we want to do with Brex."
From teen coder to budding entrepreneur
At 12, Dubugras started downloading college textbooks and other materials on programming from the internet. By the time he was 14, he'd taught himself to code well enough to create his version of that Korean role-playing game called "Ragnarok," which Dubugras says was popular in Brazil at the time.
The game he coded himself was an obvious rip-off of the original game that he'd originally created mostly for him and his friends to play. But after a few months, more and more people were playing and eventually Dubugras says he made "tens of thousands of dollars" from in-game purchases before the legal warning from the original game's Brazilian distributor.
When he was nearly 16, Dubugras took the money he'd made from the game, put his coding skills to use, and launched his first start-up: an app that would help Brazilian teens navigate the U.S. college application process, with tips on how to practice for the SATs, prepare essays in English, and apply for a student visa.
The subject of the app, which was called Estudar nos EUA, was near and dear to his heart, inspired by his own dream of attending Stanford — which itself stemmed from his love of an American television show. (It was NBC's "Chuck," whose title protagonist attends Stanford and then uses his coding skills with the CIA.)
But the business "failed miserably. It didn't work at all," Dubugras says. Though the app managed to attract roughly 800,000 users, according to Dubugras, he was "never able to monetize it" because not enough of the students visiting his site were willing or able to pay.
Around that time, Dubugras met his Brex co-founder Franceschi. Both were self-taught Brazilian coding prodigies, and they connected on social media.
Franceschi had gained some notoriety in Brazil when he was 11 for hacking the iPhone's software to get the Siri to understand Portuguese. He ended up speaking about his exploits at a Tedx conference and landed software engineer jobs at Brazilian start-ups while still in high school.
When he and Dubugras met, "we started fighting on Twitter to see which [software for coding] was better. And it got super hard to fight over 140 characters, so we went to Skype, and on Skype we became best friends and decided to start a company together," Dubugras says.
That first start-up was Pagar.me, which Dubugras describes as the Brazilian equivalent of U.S. payments start-ups like Stripe. After the company had grown to the point where it had 150 employees and processed over $1.5 billion in transactions, they sold it in 2016.
The friends both been accepted into Stanford (realizing Dubugras' longstanding dream), but they also felt they could "dream bigger" by leaving Brazil for Silicon Valley.
College 'wasn't as fun as we were expecting'
When Dubugras and Franceschi started at Stanford, they discovered "it wasn't as fun as we were expecting," Dubugras says. "You know, we'd [already been] running a company, having an adult life, and it was kind of hard to go from that to college. So, we were like, 'OK, let's start another company.'"
After only eight months at Stanford, Dubugras and Franceschi dropped out and landed a spot with the start-up accelerator Y Combinator with plans to launch a new company focused on virtual reality.
"We thought, 'Look, we learned payments without knowing anything, I think we can learn VR,'" Dubugras says. "Then we started it and we just felt like, 'We have no idea what we're doing.'"
They pivoted back to their comfort zone — payments — after noticing that a lot of early stage start-ups were having trouble getting corporate credit cards. But with Brex, Dubugras and Franceschi decided to look past credit history and focus instead on start-ups that have raised money from investors and giving them high-limit charge cards without demanding a personal guarantee from founders.
(Brex curtails its own risk by setting card limits for each client that are directly tied to how much money that client has in their corporate bank account. It also reserves the right to pull a client's credit line.)
Brex launched in January 2017, when Dubugras and Franceschi were around 20. The company initially operated out of a house Dubugras shared with two roommates before the first Brex office opened in a space on San Francisco's Market Street that he describes as "very small" and "very cheap."
Until recently, the company had 60,593 square feet of office space in San Francisco's SoMa district, but Brex gave up its lease and the company is moving toward a remote workplace, as Dubugras and Franceschi themselves have moved to Los Angeles for warmer weather and to encourage their employees to go remote.
A year after launching the company, Brex was valued at more than $1 billion, thanks to major early investments that included $50 million from Y Combinator and another $125 million from a group led by investment firms Greenoaks Capital and DST Global.
Dubugras says it was much easier for Brex to raise money because of the success he and Franceschi had already experienced with Pagar.me. And there were lessons learned. For instance, Dubugras says, they'd mostly hired their friends (teens and others without much business experience) at Pagar.me.
With Brex, "we hired people who had gone through something so we can learn from them," Dubugras says, including its CFO, Michael Tannenbaum, formerly the chief revenue officer at fellow fintech start-up SoFi.
A winding road
One of the biggest challenges that Brex has faced was fallout from the Covid-19 pandemic and its effect on the start-up community that makes up the bulk of Brex's client base.
In what Dubugras says was "the hardest day of my life," in May 2020, Brex cut roughly 17% of its workforce (about 62 people) at a time when Silicon Valley was bracing for the worst. However, Brex also raised an additional $150 million from investors, public markets soon bounced back and particularly the online economy (where many of Brex's startup clients operate), thrived.
"We got to the pandemic and we just didn't know what was going to happen, you know? It turned out to be fine, but I remember that in March, April, May, people were saying that this was going to last three years," says Dubugras.
After making "really, really tough decisions" to save money, including pulling or reducing credit lines, business started picking up again in the summer of 2020. In addition to restoring most customers' credit lines, Brex started hiring again. Dubugras says he believes 2021 will be "a good hiring year for us, and maybe we can even rehire some of the people we let go."
Now, Dubugras is eager to work toward his goal of growing Brex over the next 30 years. "Our mission is to reimagine financial systems so every growing company can realize their full potential," he says.
It seems to be easier than trying to process Brex's meteoric rise in Silicon Valley to a multibillion-dollar valuation with Dubugras and Franceschi at the helm as co-founders and co-CEOs.
"It was overwhelming for sure," Dubugras says of the company's rapid ascent. "You just felt like we won the lottery in some way."
Still, he's quick to note that the two co-founders are still too focused on growing the company further to allow their lives to change all that much. "I live with my co-founder and my girlfriend and our dog," he says. "So, you know, we still have roommates."