You can’t patent a credit product. As soon as other lenders see this business, their margins will be competed away. That 2BN valuation looks very artificial.
You think this time big financial institutions are going to maneuver quickly enough to become viable competitors in this market before a startup establishes a decent foothold with a comfy moat?
That has literally never happened before to my knowledge. See online payments with Paypal, robo-investing with Betterment, crypto-currency with Coinbase, etc.
The more likely scenario would be other startups rising up to compete with them, but it seems like these guys have a decent head start with 100 million funding and what looks like a compelling product judging from their traction.
I take your point re the ability of banks to innovate. But the Brex product is not technological. They are simply saying, we’ll lend against cash collateral. That’s the type of things banks might be better at.
