How Brex Hit $100B+ in TPV | M&A & Road to IPO

26:21They're doing acqui-hires around that price. You give something back to the cap table and everyone moves along. And so it's pretty interesting to now see essentially like acquihires on steroids. But remember, it's not just meta, right? You had character AI where the CEO left. You had Amazon and Adept AI, which was about a year ago. You have meta now also going after SSI's founders, which we should get into as well. But on the scale situation, look, I think it's really interesting because first of all, if you're Zuck, you had to get the, I think you had to get the investors or you definitely had to get the investors of scale behind this.

26:58And so the way that he did it is super creative in the sense of he allowed a buyout at 14 billion, which is exactly the number that they were valued at just last year. Just like Wiz was bought for 32 billion, not 30, because their last valuation was 16. And these VCs, they want to show a nice two X. And so here it was, okay, it's$14 billion was what they were previously valued at. We're going to value it at 28. So 2x that last round, but we're going to cash everyone out at 14 billion. So you at least, you invested at that price or you invested before that, you make money, you get your money back.

27:35And now you're kind of rolling, the investors are rolling their stake into the 50 % that Meta didn't buy or 51 % into like scale AI 2.0, which is, you know, TBD, what that company even does. if Alex isn't there since he'll be at Meta. But from what I'm reading, they're going to continue to run the business. It's going to be super interesting to see what happens to both Facebook with the Superintelligent Lab and also with Scale AI. I was reading over the weekend about Scale AI has a bootstrapped, very fast competitor, Surge AI. Yes, yeah. I'm sure you heard about it. And so in many ways, it seems like it was potentially just a great marriage of two people.

28:19Like, you know, the best, when you're thinking about deal-making, you always, you don't actually want to screw over your counterparty, even in M &A. Like, I know I talk a lot about, like, you don't want to be nice. Like, you know, you want to get what's yours. That's true, but it still needs, the deal needs to make sense for everyone. Otherwise, like, something's going to get screwed up at the end. Someone's going to call it off. And so here you had Scale.ai that had a competitor that was at, I read like a billion in revenue. They just missed projections and you had Meta that needed to jumpstart its AI problem.

28:53And specifically, you cited it earlier. He's hiring the people that have the brand name because that's I think it's really like a market play. It's perception, you know, random Wall Street hedge fund guys, they don't really know the difference between the AI talent. And so with this big play, Zuck can say, hey, we're making like a huge push here. We're doing this. And look, the share prices responded. I mean, there's a lot going on, but it seems to have responded positively versus if he said, look, we're going to spend, you know, 5 billion recruiting top talent at all of these engineering schools.

29:25I don't think anyone would really care. They'd be like, okay, like, I don't think he has a strategy. So I think it's interesting because I do think as a public company, you have to have both your strategy, but also a strategy that the street understands. And I think Zuckerberg's been masterful at making those strategies the same in the sense of like, he says something and then people understand it. And then in many cases, it's worked, you know, like with Instagram, like with WhatsApp, like with some of his pivots. That's a really good point. With a public company, you have to have public market signaling.

29:56It's all about public market signaling. So you want brand names, you want like things that are already known pretty generally because retail investors, other hedge funds, they're placing bets on that. I mean, at the end of the day, it's like a news pumping game. And people are always going after a different kind of headline. So if you can get the headliners and add them to your stack, it's like a great play. Yeah, exactly. And look, I think the truth is like Alex Wang did create a generational company in Scale AI. You know, they've been Brex customers since day one. Sorry to give the plug. No, you need to give the plug.

30:32You need the plug. Scale AI, Brex customer. Since day one. And now they're a huge business. But point is he built a generational company. I think this is a very exciting move. And I think that he's going to be very successful at Meta. And I think that the truth is it's like it's a ballsy play. But like Zuck does like makes ballsy plays. Could you like explain a little bit more on like the 49 percent ownership? Because I feel like people don't really understand that part. In terms of what specifically? Yeah, like they so you mentioned a little bit of like acquiring it for 14 billion. They bought a 49 percent stake.

31:05But like what does that mean? Like it just seems kind of hard to understand. Yeah. So essentially the line of like 51-49 is I think of it as like a red line in the sense of that. And like the whole company was essentially bought out, though. That's what I think the confusion is. Well, essentially what that means is basically control of the company remains with the other shareholders that aren't Meta. Meta becomes the largest minority shareholder in Scale.ai, but from an accounting point of view and from a, I guess like once they own 51%, Scale.ai is now owned by Meta. And like, you can't say it's an independent company.

31:47You don't necessarily have investors that are thinking that it can chart its own path because it's squarely owned by Meta. And so in this case, It's a line that, again, is back to regulatory where like, if you ask me, did Meta buy Scale AI? Did they acquire Scale AI? The answer is no. If it was 51%, the answer is more yes than no, because it's a majority. And so the idea is Meta probably, again, I don't have any insider info, but they went to all the investors and said, hey, like, we're going to buy 49%. So you get cash out of this valuation and you get to roll your stake. And so you'll get to own whatever happens to scale AI.

32:28I'm taking the CEO. Customers might churn. You know, a lot of things might change. But like we don't own, to be very clear, like we don't own the company. That's good. I needed further clarity on that. Yeah. Sorcery is brought to you by Brex, the financial stack trusted by more than 30 ,000 companies, including one in three venture-backed startups in the U.S. Nearly 40 % of startups fail because they run out of cash. Brex is literally built to help founders avoid that. Unlike traditional banks that let your money sit idle, chipping away at it with fees, Brex is designed to help you spend smarter and move faster.

33:04Their all-in-one solution combines checking, treasury, and FDIC protection into one powerful account. You can send and receive money globally at lightning speeds, get 20 times the standard FDIC coverage through their partner banks, and even high yield from day one. with same day and even same hour liquidity. Access your funds anytime. Companies like Scale AI, DoorDash, Service Titan, HIMS, Anthropic, Flexport, Robinhood, and Plaid trust and use Brex. Start today at brex.com slash sorcery. That's B-R-E-X dot com slash sorcery. There's other huge deals going on. Could you share more? Like what are the biggest deals that have happened recently?

33:48In like my space or just in tech in general? In your space specifically, what are the biggest deals that have happened in M &A and why are they so significant? Yeah. So the ones that I've been tracking really closely, the first one that comes to mind is Capital One and Discover. Huge deal. This is not a tuck in. This like materially changes their whole business model. And the reason is because it creates the largest credit card issuer by loan volume because it allows Capital One, that is a bank, and Discover is a card network similar to MasterCard, Visa, and American Express. There are four in the US.

34:23And so now they can create what you would call a closed loop system in that it's the card that now is on a network that they own. So they both get the interchange revenue when you swipe, but they don't have to pay the network rails for everything because they own the rails. And so the reason it's significant is that it touches on two themes. Number one, the bigger, the consolidators are getting bigger. And number two, vertical integration, because now Capital One issues cards on Visa, MasterCard and Discover. And time will tell to say, hey, maybe they move all their business to themselves, because why would you pay Visa and MasterCard for their rails if you own your own payment rail?

35:05So that one we're watching or I'm watching very closely. And that was just approved. So back to my point at the beginning is that like large M &A that potentially could be anti-competitive or whatever the like, you know, could cause regulatory problems is being approved. The next one that is obviously really interesting is the Stripe Bridge deal. So, you know, that was announced a few months ago and Bridge was started by a Brex alum, Zach Abrams. We love him. Um, and that's super interesting, obviously, because it shows Stripe taking a big bet on stable coins as a method of payment, as a, as a view that, you know, consumers and their customers want to be able to transact in that.

35:51And obviously Brex as a card issuer and spend management platform, we need to take note of that. And we need to be thinking about our own stable coin strategy as we monitor what folks are doing. I think I touched a little bit earlier on some of the tuck-in M &A in my space around Amex and Airbase and some of those smaller companies. But those are probably, or those are the most interesting M &As that I'm kind of taking note of at the moment. As you watch all of these play out, what are the best practices or what are the worst practices that people do in these processes? I know they're pretty sensitive.

36:32It takes a long time. There's a lot of legal work with it. But like, what are the best and worst practices for M &A? For M &A. Yeah, look, so I think Paul Graham has an essay called Never Talk to Corp Dev that he published, I think, like 15 years ago, which my hot take is I actually don't agree with it. And essentially his point is that, look, as soon as you talk to a large big tech or you talk to a potential acquirer, you've kind of crossed the Rubicon, so to speak, of like thinking about being bought. And then you like can't run a business successfully because it's always in the back of your mind.

37:07So I actually don't agree with that. I think that as a founder, you have a fiduciary duty to talk to partners, talk to VCs, talk to potential acquirers in your space. Not like every month. It's a little like dating. You're basically, you want them to know who you are and be like, hey, like we're doing our thing. We're killing it. Like I'm around. Call me if you want. But like that is important because like, let's say, yeah, Stripe, I know the Stripe Bridge deal, you know, you can read about it. That deal happened a lot because Stripe was aware of what Bridge was doing. They have mutual investors.

37:41Folks were flagging the traction. That's kind of what you need to get acquired. If Bridge was being built in, you know, South America or Europe or, you know, Africa, I'm not sure that that M &A would have happened. The fact that it was being built in San Francisco, fortunately or unfortunately, I think is relevant because you had the same group of founders, partners talking to each other and flagging that this is interesting. So number one, I think you want to stay in the information flow and you can do that by like posting on X, going on Sorcery, or just, you know, reaching out in a way that is kind of innocuous to folks that you think you should be on their radars.

38:21The second is partnerships. I think that most successful M &A, I would bet, you know, I have to run the numbers on this, but most successful M &A comes in tech where the companies have been partners first. Because like, why wouldn't you take a call option on a relationship? There's a million reasons why a partnership will fail. But if it's deriving customer value, you know, you could still hate the other party because they're assholes or it doesn't actually work because for whatever reasons that the joint customers don't react in the way you thought. And so with Stripe and Bridge, they were partners for most of Bridge's life before Stripe bought it.

38:57So it's sort of like, how do you know the M &A is going to work? Well, because the partnership work versus you kind of fly in and acquire a company that you've never actually talked to. you know them for like three, four weeks, like that feels like not the right way to do it. So I think you want to potentially use partnership as a wedge in, you want to get to know your potential acquirers or potential sellers if you're on the buy side. And I think the last thing I would say is like, in the process, you know, Silicon Valley has this adage of like, being really nice, like being really nice gets you places.

39:31It's the right way to behave. Like you want to open Is that an adage in Silicon Valley? I feel like at least a little bit. It's sort of like people want to help each other and like, because you never know who's going to make it. So you're always like trying to stay in everyone's good graces is my like cynical New Yorker take on it. It's not because everyone in Silicon Valley is like a good person. But my point is in M &A, it's the opposite. I think you don't want to be nice. You want to be not rude, but you want to be direct and you want to be harsh. You basically want to be like, listen, like, because a lot of large tech corp dev teams like sniff around.

40:01These people have nothing to do, Molly, like these corp dev people at large businesses. And so they just call up small founders. And this goes back to why Paul Graham is saying this. They call up small founders and they're like, oh, you know, like we should chat about M &A. And those founders go on a dog and pony show also because they haven't read my ex. They haven't read the books on M &A. And so they get dragged on like a six month's journey. And they shouldn't do that. It should be like, hey, like I need an LOI tomorrow. Here's the three things you know about my company. Otherwise, like this call is over.

40:32And when the corp dev guys are like, well, like, you know, I need to talk to my boss and I need more information, then that's like a classic higher authority negotiating gambit. Then you should say to them, great. Well, it sounds like you have no decision making power. Why don't you have the decision maker call me and Zoom? Wow. Yeah. Because that is what people be like, oh, my God, like this guy must be building something really great. He's right. Like, that's not rude. It's sort of just a matter of fact. Yeah. Don't waste my time. Wow. Yeah. What else you got? This is great. In terms of when you actually started the M &A process, I think that's when as a seller, you're actually at the most weak negotiating point.

41:12So be very careful. So that's when you got something in writing and you're bought in, but nothing's closed. That's when the buyer will try to do what they can to extract more value from you. And I think that's why you have to have a real champion on the other side. And so I think like probably one of the reasons these M &As at Meta get done and it seems are successful, you know, WhatsApp, Instagram, I don't think you can say those aren't successful M &As, is because he, at the founder level, was really bought in to those deals and making them successful. Versus if a corp dev guy, and I've been a corp dev guy, so I can, you know, I can keep kicking these guys in this conversation.

41:49Like, if he's your champion, then like, best of luck. Like, you're not going to be successful as a founder at the new company. Like, sure, maybe you'll get paid on closing day, but like, what about after? Because I think one of the things about these founders is, or founders in general is like, they want to build. And the reason you sell a lot of times is because you want to sell. I mean, there's a lot of reasons, but I think one of them is for, to create something bigger under another rocket ship, right? Like Alex Wang is not retiring. He like wants to use this platform to continue to build. And so I think like when you've convinced yourself that big tech is right for your company and they're going to scale your distribution, but you haven't closed the deal, like that's when you're at your weakest point.

42:28So basically I'm saying like, be super paranoid. Don't tell everyone the deal's happening until the wire hits, literally, because I've seen some crazy shit in my time. Like until the wire hits, like this deal is not closed. Yeah, yeah, same. And also just make sure you have a true champion on the other side where there's someone who has skin in the game. Because basically what I'm saying is that as a founder, you need someone to care how the deal goes post facto, because otherwise you're going to be basically losing all leverage at the time you signed the like indication because you guys agreed on price and everyone's going to just like try to get the deal done.

43:02And you have to be like, well, no, wait a second. If you don't do these things for me, like I'm not going to make it successful once we close. And so you need someone on the other side that really cares that that's what I would say. No, this is really interesting. I'm quite curious. I've experienced this in my day, been in VC for like seven years now, but I'm curious from your standpoint, what are the different types of archetypes for the buyers? So you can have a PE company, you could have a large big tech, you could have like strategics. There's all these different kinds, but like, what are the different kinds of processes that they run?

43:33Yeah. And what are things you should be concerned about? Yeah. So I think it really depends on scale of company. I think one of the exciting things that we're seeing with M &A this year is that a lot of these deals are at the size where you might think a banker would be involved. So once you're selling to PE, I would say absolutely use a banker 10 out of 10 times, because that's like a tried and true method of like a data room and a management presentation and like a whole dog and pony show. But what we're seeing, especially this year, is a bunch of early stage, what I would call like times where I'm sure like, I don't think any of these deals that I mentioned, Winsurf and Johnny Ives, there wasn't a banker on that because it seemed like these companies didn't have that much traction just yet from a revenue point of view, but they had a massive amount of traction from a product adoption or customers or user point of view.

44:26And so it's super exciting because you're seeing these huge outcomes even without the usual like trusted advisors that would take you through the process. So when you think about the processes, I think that there is big tech that approaches you as a startup that has traction. So a lot of these AI companies that are raising right now at like 500 billion, 2 billion, 3 billion, all of them, I'm sure they probably have been approached by like one of the big tech companies about an acquisition. And when that happens, it's sort of basically like, okay, one company has reached out to us. Should we take the deal and start negotiating or do we wanna run a process or are we just, we want to go back to building?

45:12And a lot of times the first call a founder makes, which is right, is to their board to talk about the potential M &A deal. But I think the truth is that even with your board as a founder, I'm not sure your incentives are completely aligned because it's back to, well, first of all, what is the price on the table, right? Is it a nice two or three X for the VCs on the board or not? Because if it's not, they're going to tell you not to sell, even if it's life-changing money for you and you've been at it for 15 years, like, right, like you kind of have to know when you're talking to someone what their incentives are.

45:42So you can run a small process where it's like meta reaches out to you. So maybe you then figure out a way to talk to Google and open AI or something like that, or you hire a banker to run a process. But once you've hired a banker to run a process, suddenly you're truly for sale. So basically taking a step back, if you're talking to PE, use a banker. If you think you're going to sell, but you know, there's only like one acquirer. I think that you can figure out how to extract value by yourself with your board. I'm not sure you need a banker. And then if you're, if you, if you're starting, you get an indication and you want to launch a process.

46:21I do think that it's good to have a third party help intermediate, whether it's a banker or investors on your board or things like that. I mean, And like one of the most interesting parts about the Stripe bridge deal was that it seemed that the one of the investors from Sequoia on both boards was like pretty instrumental in helping to get that deal done, which you don't see very often. And it's a testament to that, to the brand. I think it was Sean McGuire, this great guy who kind of helped structure that. But usually you see that from bankers or you have to be the founder who does it themselves.

46:59Not to kick this in too much, but with a PE process or one of these processes, when should you pull the cord? Like, when should you back out of it? I've seen processes before where, you know, next week, oh, lower price, something happened. We want to reprice it or something like that. The number one advice I give founders on when they're testing the waters on M &A is to not tell anyone at their company. because as soon as you get folks excited, it's a little bit like raising around, but at an extreme, as soon as people at the company, even if it's just your CFO knows and he sees dollar signs or she sees dollar signs because like Google offered us this and he doesn't go through, everyone is disappointed.

47:42And so morale declines. You need to be hitting numbers throughout the conversation with the acquirer because if they pull out, it's like, great, go fuck yourself. I'm now going to be three times as expensive next year because as you can see, I'm growing 300%. And since we started talking, all my numbers look better. Like, again, like, have a nice day. Yeah. And so you need to not get people invested. It's again, it's like back to relationships or anything else in life. As soon as you're more invested in the other party, you lost all your leverage. And so you need to like be guarded, be avoidant, and just like be doing your thing.

48:18Dating advice. It's hilarious, but also very helpful. No, it's really true. It's really true. It's really true. Sensitive either way and true. Okay. So taking all of this, I want to wrap it up in a bow. Okay. If you could break down the main reasons why people go after M &A strategically, could you just share those? Maybe it's specific distribution. Maybe it's like technology. Maybe it's talent. Like what are the main reasons people go after M &A? Yeah, look, the way I think about it, there's three types of M &A. There's talent M &A, there's product M &A, and there's full business M &A. And I think those are really the three reasons acquirers go after M &A.

49:03Talent M &A, self-explanatory. You're literally paying whatever price. Back 10 years ago when I got my start, it was a million dollars in engineer. Now it's a billion dollars in engineer. It's like actually insane. Okay, but that's literally a talent deal. When Zuck went to his board, it's like, hello, we're going to spend$14 billion and X billion on SSI just for talent. It's actually pretty self-explanatory. Number two is product M &A. So this is, there's a company, probably an AI company. They're doing something super cool. There's a ton of traction, but it's very early. I believe I can plug this into my distribution systems and I will get a 10X return on whatever I'm paying.

49:39And yes, it's early and I'm paying a billion dollars or 2 billion, but like I'm confident it's going to work. And that's Instagram and WhatsApp. We can actually just use meta for all these examples. Meta, meta, meta. Meta, meta, A-I-A-I-A-I, actually. I think they just changed their name. Yeah, yeah, they changed their name. So Instagram and WhatsApp, where like there's a ton of users, but like it's not like a fully flushed out business. And the third is what you would call like business M &A. And so this is more common actually with like PE firms or like more later stage companies where you're basically, you have a standalone business and you're buying it as is because you believe that like, yes, you can help it on the margin, but you're not, maybe you can help it a lot, but you're not actually going to change that much about it.

50:23And so that would be, I would say like whiz. And honestly, WhatsApp might have been that because like Facebook hasn't really changed WhatsApp that much since then. But so the idea would be like, and honestly, like ways, if you like you use that product, I love that product. It's sort of like, it's kind of just stayed the same since they bought it. And like, maybe that's in that, that could be a negative in the sense that like, are they really extracting all the synergies? Cause they haven't brought it all together. A different example of that would be this capital one discover deal, right? It's very clearly going to change capital one's cost structure to own a network.

50:58And they're going to plug that network in and issue all of their cards. And that's going to be vertical integration like, but a discover is its own standalone business. It's not just some like cute fintech startup. And so that is what I would call business. Okay. So we need to shift this over to Brex because you are the expert. You're the chief business officer there. We literally haven't talked about Brex in one hour. I know the sign is like right there presented by Brex, but presented by Brex. Yeah. We need the, I don't know. Do I even need a Brex segment in this? It's all Brex. Okay. I could wear, so one time in San Francisco and hopefully someone listening to this was at that party.

51:36But when I was at Teespring working for our friend Jack Altman in 2013, Halloween party, I actually dressed up as my own business card. What? Yeah. So it was head of corporate development at Teespring. It was a business card and I just poured it to the party. So I could have done that with a Rex card. Oh my God. So nerdy. We can cut that out. That's hilarious. No, we'll keep it in. Okay, so expert over here, M &A Partnerships, Chief Business Officer, Art Levy. Could you walk us through how you're thinking about this at Brex? I know you just had some really big announcements with Zip, and you've also had big announcements previously with Coupa.

52:14So how are you thinking about it at Brex? So specifically, how do we think about partnerships? M &A and partnerships. M &A and partnerships. Fair enough. Yeah. So I think the way we think about M &A and partnerships at Brex is candidly a lot like how we've been talking about it to date. And so when we think about partnerships specifically, one of the things that Brex has done really well, I think, is we're really serious about meeting our customers where they are and giving them what they want. And so that means a delightful product experience on Brex and everything Brex offers. But it sometimes also means that depending on the customer, making sure we play nice and integrate in a delightful way with their other tools.

52:59And I think one of the things that Brex does differently than other players in the space is that our product is more modular. We have a suite of five products, but you can use our card without using our bank account. You can use our card without using our travel portal. You can use our card without using our payables product. And that's really important because depending on the company, you might have your system set up in a different way. And because Brex built our infrastructure, we can play nice and delight the customer in that situation. So you mentioned some of the partnerships we've done in the last year and a half.

53:33The ones I'm the most proud of, there's Zip, there's Coupa, there's Navon. All of those were joint customers coming to us and saying, hey, I love your product. I love this product. Why can't I use them together in a better way? Navon, literally the president over there, Michael, he's become a good friend of mine, came to us a year and a half ago. And we had like 2 ,000 mutual customers. And there were a lot of them being like, hey, like, why can't I pay with Brex in my Navon portal? It doesn't make sense. What is Navon? Navon is the leading like travel management company. So they work with large global enterprises, companies like Unilever, Heineken, and they help you manage your travel experience as a company.

54:16And so you can basically make sure people aren't flying first class. You can make sure they're staying in budget. You can make sure they are booking the right flights. And so essentially the idea there was, hey, Navon had been building their own card. Brex had been building our own travel system, but there was a segment of customer, namely the largest companies in the world, people like Coinbase, people like Service Titan, Anthropic, Wiz, that wanted to use the two systems together because that was what that customer wanted. So why should either of us or anyone try to jam down your throat? Hey, it needs to all be one system.

54:54I think that as long as you integrate well with other parties, partnerships can be really additive. And we've seen that in the revenue growth that we've gotten from them. That being said, you need to pick your partners carefully and you can't like partner with everyone under the moon because otherwise it confuses the customer experience. So taking a step back, our strategy has been to partner with other best-in-class vertical software players to create a really delightful joint product that customers love to use together. Just as much as we do. That's why Sorcery uses Fourth Wall. Everyone from creators like Marques Brownlee to podcasts like Acquired to orgs like the Smithsonian Institute are using Fourth Wall.

55:38They let you create and sell premium products without having to stress the details. They handle everything from production, shipping, customer support, taxes, even giveaways. When it's time to level up and make gear that people are actually proud to wear, that's when it's time to use 4th Wall. And that's why we've trusted 4th Wall for all of our brand wear at Sorcery since day one. Use my link in the description to get free credits for your first order. And for any VCs, DM me on X, and I can get all your portfolio companies set up with a free samples credit deal. I want to go particularly into Zip because I thought this one was fascinating.

56:15Yeah, for sure. You both were once viewed as extreme competitors, but now you're allies, you're partnered together. So how did this one evolve? Yeah. So look, I think one of the nice things about being at one company for a long time is that you get to see things come to fruition. So I first reached out to Zip in August of 2021. Because I saw what they were doing. I heard about it through. What do they do? So Zip is a intake to procure to pay system. So essentially what that means is it helps large enterprises and growing companies manage their purchase workflows and figure out, hey, like there's this contract coming in.

56:57Has it been approved by the right people? And then has it been paid correctly? Have I gotten all of the right approvals on these large ticket spend items? And it's really important as a company that you keep track of all of the approval workflows for large ticket spend items, of course. And so they created a really delightful user experience for mapping that procurement workflow. So the way it came about was, yeah, I reached out to Rajul, the CEO, four years ago and wanted to talk about partnering because at the time we didn't have any procurement and they did, but they were serving very large companies and Brex at the time was still serving largely startups.

57:41And so he essentially told me that there was no partnership here because again, back to one of the things I've said, you need to have joint customers. So, you know, that was me trying to push what I thought would be very good for us to get into enterprise, um, by working with them. And they were like, well, wait a second, you don't have any enterprise presence. Why would we work with you? Very smart of them. And this is like an example of when one side is pushing a partnership that doesn't work for both parties, right? Like, you got to practice what you preach. But then two years later in 23, I reached back out again and was like, hey, like, look at all these great logos that we're working with.

58:18We should talk about doing something. But at the time, we were still pursuing our own procurement strategy for, you know, for large enterprises. And so again, Zip was like, wait, like, it seems like you guys are still kind of doing what we're going to do. And also we might launch a credit card, like credit cards seem like a great revenue work stream or revenue stream. So I'm not sure it's the right time. And so then after it's sort of like post Zerp, call it again, like similar timing, like March of 2024, we started talking again. And now it was perfect timing. It was Brex has massive traction with enterprises, and we've focused on partnering in enterprise outside of card and spend management.

59:03Zip had decided, you know, like, we don't need to build our own card. Let's just focus on the best intake to procure to pay system for all types of companies, not just large enterprises. Let's do a deal here. And so we started building together about six months ago. We signed that we were negotiating. Then we started building six months ago and we announced that deal a few weeks ago. And the customer feedback has been overwhelmingly positive. Yeah. People are really fired up. And again, it's back to something I like to say about partnerships, which is like, you need to partner with folks that are similar to you in order for it to be successful.

59:40It can't be one really large company and one really small one or one that serves companies in one space and one in the other. Because then again, it's like, what's in it for me? Everyone's in business. It has to be an exchange of value. Like another thing I like to tell my teams that I, that I, I, you know, I really like to give credit to Christina Cordova over now she's at linear, but she was at, at Stripe, like the OG killer at partnerships is I ask folks, who is our Shopify to, to their Stripe? Because Stripe did a partnership with Shopify and they were both actually valued at a billion dollars when that partnership started in around 2013, 2014 ish.

1:00:16And they rode together, right? Those are now two of the largest companies in the world. And so I like to say, look, we're the payment side. Brex, obviously, like, who is our Shopify? Who are we going to ride with through to the sunset and like scale with? Because that's the best types of partnerships. Like Zip and Navon, I think, are both examples of potential Shopify's because they're both growing extremely quickly. We're growing extremely quickly. Everyone grows together. You don't want to be partnering with a slow incumbent or, you know, a lot of startups try to partner with companies that are much bigger than them because they're like, oh, oh, great, I'm going to ride off of this company's coattails.

1:00:49It's like, no, because that company is going to say, like, what's in it for me? Okay. I have a challenge for you. Okay. You recently partnered with Warp. Yeah. Yeah, I knew. So can you share about this? This is an early stage company. That's an early stage company. Yes. Yes. But, but. But. The partnership there, and I also partnered with Sorcery, right? So you could also. Of course you did. Yeah, yeah, yeah. You could also. Except Sorcery is already on. Yeah, yeah. Sorcery is a pretty similar valuation to Brex from what I heard. Actually, a little bit, a little bit higher. Oh, oh, oh, makes sense, makes sense.

1:01:22So yeah, so Warp, really interesting payroll company, done a fantastic job over there. The traction there is really exciting. But again, with them, we do have a partnership and we're really excited about it. But the partnership is really commensurate with the size of Warp today. And what I mean by that is that we're taking a crawl, walk, run approach with them. So we're starting with some amazing co-marketing. We're going to push Brex to their base. We're going to make Warp a key rewards partner. But the engineering side of it and like a product lens side, that will come later if and when it makes sense.

1:01:59And so you do want to be taking bets. And one of the things that another one of my mentors likes to say, Emil Michael, is that like BD and product partnerships should be the VC arm of a company. And this is what I tell my team is like, look, we need to look for pole vault opportunities, but we're going to fail sometimes. Like, yeah, Navon Zip are going great, but there's a bunch of other partnerships that haven't necessarily worked out as well as I wanted. And that's okay, as long as you get your winners along the way. But what you want to do is with someone like Warp is you want to see if the customers like the two products together.

1:02:32You want to see if they keep growing. We want to see that like, neither of us is trying to build in each other's space. And then in six months, a year, you're like, okay, let's put a product lens on it. And if we did, how much more would that help? The thing with Navon and Zip that's so important is that those partnerships were really based on the fact that we wanted an integrated product and then the distribution would come. We didn't come in there saying, look, I want an extra billion in revenue. Let me go like glom on to Zip. It was customers being like, hey, I need these products to talk better to each other, like figure it out.

1:03:06And then we did. And then it's like, wait a second, now that they're talking better, we have a killer go to market, a joint go to market motion here, because, you know, we're going after the same customers. People love both companies, et cetera. I want to go back to something that we talked on briefly previously, but this is more strategic. So like, as you're thinking about these partnerships, M &A, the growth of Brex's business and different areas you want to get into, we talked about stable coins and stable infrastructure. So Stripe just did some big deals, like we mentioned, with Privy and with Bridge.

1:03:43How are you thinking about stable infrastructure for Brex? For Brex, yeah. Yeah, so look, fantastic outcome for Bridge. Amazing deal by Stripe. I think, we think it's very interesting. Um, when we think about integrating stable into our product over the past six months, we've been exploring a number of partnerships with on off ramps into stable coins and really thinking through what is the actual customer pain point that we're solving. So if you take a step back, like what are the pain points that stable coins solve? It's we believe the main use case is around global connectivity and solving for currency and FX.

1:04:24And as you think about Brex, one of our main differentiators is that we've created a network and global funds flow for customers that allows for what's called constant currency because we issue cards locally in 60 plus markets. So essentially, the big use case for stablecoin, at least as talking to our customers, has been around this global funds flow and cutting out swift banking fees. And we believe that we've done some of that, at least to date, with the partnerships we've set up, the local banks that we're working with globally, and a lot of the technical infrastructure that we set up. That being said, we can always get better.

1:05:08And so we need to and are actively looking about how to use stablecoins to augment what we're doing. But I think that's the way we're looking at it as like an augmentation of something that we've been working for several years to build, because I do believe our global infrastructure is one of our biggest differentiators and stable coins will make it better. But we don't feel that we need to rehaul the whole global infrastructure that we've built to date. It's really cool to see this be integrated across the market with more like legacy institutions as well. I don't know if you listened to it, but Patrick O'Shaughnessy had one of the heads of Apollo on his podcast.

1:05:48And they were talking about how Apollo has integrated crypto and like blockchain rails within their actual like platform and how they invest into things. Interesting. Like on the asset management side? On the asset management side. Oh, wow. Yeah, yeah, yeah. So Apollo is like integrated a little bit of like crypto into their strategy and how they're thinking about flows. It's been really fun to watch. What are some other like broad trends that you're excited about in this space? So look, I think that my take is the use case will start with consumer as many new technologies start in the sense of I thought the Shopify Coinbase announcement was super interesting last week.

1:06:30And then today there was another announcement about with Fiserv integrating stable coins. And so I think folks are basically anchoring that there's consumers that want to cut out merchant fees, which makes sense and make it cheaper to buy things. And stable coins and USDC will make that happen. I think the challenge on the B2B side is that, first of all, you basically already have a global banking system that is trying to cut out as many FX fees as possible if you do it in the right way. And so I'm just not sure. Of course, stablecoins will become a mainstay for B2B companies, but I believe it will take a lot longer.

1:07:13So this might be a world record podcast, but we need to talk about your specific strategy, or I guess we need to talk about why Brex. Okay. Okay. So Brex started off, I believe, as a card for startups. That's right. Now it's evolved. Yes. Okay. The rumors are true. The rumors are true. Yeah. How are you going to dethrone Amex? Yeah. So look, I think everything you're saying is true. We started as the corporate card for startups. That was the beachhead into the larger market. But I think that the way that we are going to dethrone Amex is our ability to serve a broader swath of customers in, frankly, it's easy in a better way.

1:08:00and allow them to enhance their workflows in a way that makes them spend smarter and move faster. And so what exactly does that mean? What it means is that when you look at the spend on Brex, actually only 22 % of it is what we call T &E spend. So that's on like travel and restaurants and burritos and Ubers and Waymos. The rest of it is actually on the things that help a business run. And so that's like, you know, your server costs or things that go through Zip or Coupa for procurement. These are the, what you call operational spend, basically the things that help businesses run. And the reason that's important is that that spend used to go through procurement and used to be spent on like via ACH or wires.

1:08:51And the reason people are putting it through BrexCards is because, or companies are, is because they get more controls on it while maintaining the speed of a T &E corporate card. Speed meaning like it's easy to review. It syncs with the ERP. You get a lot more control over, you get more data from it. You get the what's called L2, L3 data from the network. So you can basically close your books faster is the easiest way to say it. And so what we're actually seeing is that for mature cohorts, customers are spending 60 % more on their Brex cards than they were on Amex in the last month that they were on Amex.

1:09:31What? 60 % more. And so what does that mean? It means that they're finding new use cases for the product. It's not that they're hiring a bunch more employees because these are non-tech companies, by the way. It's that there are more use cases for Brex because they're putting it through procurement and we have an integration with Zip. Amex doesn't. They're doing it through Navon and we have an integration there that works much better than Amex's. They're finding ways to give P cards, procurement cards to their employees to spend on things, virtual cards, so to speak, in ways that make them comfortable.

1:10:03They're issuing cards in geographies where previously they had to do what's called personal reimbursement. So our acceptance is really good in the Philippines and in Asia. That's a region where previously large multinational enterprises would just give what's called reimbursement. So they would say, oh, just spend on your personal card and we'll pay you back. Now they're giving those folks Brex cards and they're buying, you know, desks and chairs and tables. And so all of that is new, what we call new spend. DoorDash, one of our beachhead customers, they've been on Brex for now three years. They're spending many multiples more on Brex than they were on their American Express.

1:10:40And that's again, back to, so how do we dethrone Amex? It's that not only is global payments, one of the largest market in the world, it's that we're uncovering white space opportunity, which is super exciting. So how big is this market and what is the business model for a corporate card? Like revenue, margins, give us all the insider info. There's about$2 trillion of U.S. commercial corporate card spent. And so what that represents is the top 100 issuing banks on MasterCard and Visa plus Amex commercial card volume is around$2 trillion a year. And so that's, again, only in the US. So let's just let's keep it simple and look at that.

1:11:27Two trillion. Then when you think about what Brex is best for, which is basically all companies in the US that have, call it more than 20 employees, as well as aren't in fleet cards or government cards, that's spaces we've looked into, but right now aren't necessarily serving. So that might take off another one of the trillion, actually. It's a lot. So now you're left with$1 trillion per year as the TAM. Now, we've done a lot of research on this, and about 20 % of companies are evaluating their commercial card program per year. And so that means that there's$200 billion of serviceable TAM per year in the U.S.

1:12:17because there's that many companies, card volume that's up for grabs or what we call flow share or jump balls if you're into basketball. And so essentially, Brex has to win a tiny single digit percent of those jump balls per year to grow extremely quickly in the sense of like$200 billion of opportunities up for grabs. That's hugely exciting at a time where, you know, Brex, we're growing quickly and we're a big business, But that even a single digit, single digits percentage of that card volume would materially change the business. And so when you think about the business, we're monetizing through card interchains mostly, but folks are choosing us because of the software.

1:13:01It's back to the example I gave with, um, with customers using us over American Express. The fact that they're using us for 50 % more card spend is because of our spend and controls is because of software. If we were just another kind of, quote, dumb corporate card issuer, they wouldn't be increasing their spend. And so what that means is they're choosing us for our software, even though we're monetizing through financial services. And so when you think about the business model, we believe that we monetize 20 times better than other spend management systems, systems like Expensify or Concur, because we monetize through financial services.

1:13:41Concur is a 30-year-old company, I think what I was reading online, their revenues are a billion and a half. If Brex continues on our current run rate, we're going to eclipse that much, much faster by winning their customers, but monetizing through the interchange, not through generic software revenue. So revenues are mostly interchanged. We do have a growing software business and we also have a banking business. And we now are a multi-product company in the sense of we have more than two business lines at over a hundred million in revenue. So Brex is now very squarely a platform, not just, you know, a corporate card for startups, which is super exciting.

1:14:27Talking about margin profile and long-term business model, I think the thing, the way to think about it is we're opening white space opportunities. So we believe we can grow durably for, for, you know, for the next 10 years. Like the market, as I, as I broke down for you is so big that we don't really see a reason why our growth should slow. And in terms of the margins, I think that the margins can be very healthy because of the way that we've set up the business in the sense of we own our own financial infrastructure and we're winning because of the software. And so what that means is that for our customers, we don't necessarily need to always be giving crazy cash back because they understand that the cash back lever turns with the software lever in the sense of if you're not going to pay us for the software, then we need to, they want us to grow our business.

1:15:22Like our customers are smart. They know that like if something's free, then it's probably not going to be around for a long time. And so we're able to keep a really nice margin because they want us to invest in the product and we can flex the cash back down, let's say, if they don't want to pay software and vice versa. So structurally, how does Brex differentiate itself against competitors? There are some very interesting competitors in the mix that are quite loud, maybe yellow. I don't know. I haven't seen that one. I'm not sure either. I don't know what it is. But how do you structurally differentiate yourself against them.

1:15:58The way that we differentiate against our competitors is the fact that we're the only next gen category defining company that owns our own financial infrastructure. You're vertically integrated, vertically integrated, so to speak. And what that means is getting super technical is that we don't have an issuer processor between us and our banking partner and our network partner. So all the other competitors use someone like Stripe issuing or Lithic or Adyen issuing or Marketa. And they use this to help them generate the cards and do some of the software for them. We're the only one that built that ourselves.

1:16:35And the reason that matters is twofold. Number one, margin. If there's less people at the table, you have to pay less people. That makes sense. The second is you have a lot more flexibility on where you drive your product roadmap and how deeply, you know, the customer experience can be much more delightful in the sense of geographically. If there is, and this just happened last week, a customer that wants to turn on a new country and they say this was a joint Brex pay for Navon customer, they absolutely need Brex cards in Estonia. We could quickly work over a few weeks to figure out a local solution for that market versus a competitor that needs to go and call up their middleman, figure out how to make Estonia work, come back to the customer, like the feedback loop just becomes much slower.

1:17:22And so when you own your infrastructure, you can just move much more quickly. That also dovetails to some of the partnerships that I mentioned that are how we delight and differentiate in our upmarket with our upmarket customers. The only way you can build directly with Zip and with Navon and have two teams working hand in hand is if you're both building on your own rails. If there's a third person, like who's ever heard of a tri-tri-partnership, tri-product partnership that worked out? Like that sounds extremely complicated and like not something I want to get involved in. It's really, we own the infrastructure.

1:17:57We decide what we build and we basically, we own our own destiny in that way. And so I think over time that becomes a real moat because we are able to, anyone who doesn't have it is going to have to add it, which is going to take years to do. And in the interim, we're able to move much faster in different segments of the market where, you know, geographical or the other softwares they use are relevant. Playing a little bit of both sides. Yeah. Thinking from the other side, you don't own the whole stack. You don't own the whole stack. Your margins aren't as good. So do you try to make that up in volume of customers?

1:18:41Like how do you then reach like an attractive business model? Yeah, I think on the other side, the way you would think about it is that you're differentiating mostly or trying to on the software you build, not on the financial infrastructure. So I think you have to build and bundle as much software as you can to try to make more margin per customer while also, yeah, you have to win that customer either based on your software or on your, you know, rewards or rebate program. But you need to know that, yes, you're making less money per customer. Wow. So I think over time, that's a tough spot to be, especially in a world where, you know, eventually capital will not be flowing.

1:19:23you know, the market goes in cycles. So eventually, I believe, you know, capital will not necessarily be as easy to come by and it's harder to make money if your margins aren't as high, obviously. So you count over 30 ,000 customers, 200 plus of these are public companies. 200 plus public market companies on Brex today. On Brex today. Okay, all right. Okay, all right. I have a really important question for you. Shoot. Can you name every single customer of Rex? I can name every public customer. Unfortunately, I'm not allowed to disclose all of them, but I can give you a small taste. That's okay.

1:20:04Yeah, we can just a few would be fine. So Coinbase, DoorDash, Service Titan, also legendary private companies like Wiz and Anthropic, Dr. Squatch, which just got bought today. Scale AI. Scale AI. The protein bar, I think. Yes, that's right. That's right. So yeah, very proud of the traction that we now have across more than just Silicon Valley startups. How did you land these huge names? So the thing that's really cool about the names we've landed is a lot of them have grown up on Brex. So Scale AI was our first customer. Pedro and Enrique hand-delivered the card to Alex in their offices. and that's a company that's used all of our products as they've scaled, no pun intended.

1:20:55But then there are companies like DoorDash, like Coinbase, like ServiceDign that we got in the last, you know, nine months or, you know, two years, let's say. And that I think is what I'm most proud of because that shows product market fit of a completely different segment at a different time in a customer's life cycle. It's one thing to grow up with a business and scale with it. And that's why we're in startups is to back the generation's companies and stay with them. But the truth is, it's a completely different thing to convince a finance team at a large public company that Brex is the best choice for them.

1:21:29And so I'm super proud of how and why we've done that. And the way we've done that is really by identifying, again, it always comes back to the customer pain point, a customer pain point, and then driving that home. So because our platform is modular, we're able to say to DoorDash or to Coinbase, Hey, I see you're having problem with local card acceptance in the Philippines. I see you have Navon. Have you heard of Brex for Navon? When we say these things, we get in with those customers and then we're able to expand the account over time. So I'm very proud that our enterprise business is growing over 100 % and our NRR in the segment is over 130%.

1:22:08Oh, wow. Yeah. And that's back to what we've been talking about for a lot of the pod, which is you want to be growing with your customers, but also you want to be expanding the use cases and figuring out where in an organization your product fits. But you need to start somewhere. And I think one of the mistakes some of our multicolored competitors make is that they try to go in and rip whole systems out at once. What Brex is saying is, hey, use us in a region, try it out, and we guarantee you you're going going to want to scale our product through your whole organization. As we wrap up, I have just two more questions, but I'm really curious.

1:22:50I've been reading a lot on the finance fintech space. What is the new finance operating model? Yeah, so I think the new finance operating model, basically what we're seeing in our customer base is a bit of a fundamental shift in that there's a lot of uncertainty and volatility in the world. And we recently published this CFO survey of 500 large company CFOs and their views on the macro and like the way they think about their teams and their tools. And essentially, finance teams are really re-architecting their whole stack and really only wanting to work with the tools that help them better understand their business and also work well with each other.

1:23:37And I think the second point is really important because the idea is Brex wants to be one of the systems of record for a business, but it also has to work very closely with the other systems that they use. Another huge theme, as I'm sure you're aware, is the rise of AI and AI agents in finance. Finance is a space where there are a lot of numbers and there actually are a lot of ways where agentic workflows can really help and delight the back office financial manager or CFO. And basically, as a part of that, we saw that our agents, specifically our expense and accounting agents, saved folks 169 ,000 hours over the last six months.

1:24:24Wow. Yeah. And we're just getting started because the thing with Brex is it really is also a data company. We now over seven years have swiped at almost like millions and millions of merchants around the world. And so we've categorized that data. And now we're giving these CFOs and procurement managers and travel managers their data in a way that they can understand. And there are definitely agents that we're building that can help interact with that data. They can say, hey, Art, why did you fly first class on this flight? Like you shouldn't be doing that. Now, instead of a procurement manager chasing an employee, it can just be an agent inside of the Brex mobile app.

1:25:01And we already have those agents live. The other exciting thing is as we work with more what I would call like capstone partners, we're now building agents with them. So Navon has a travel agent, no pun intended, where it's pulling payment data from Brex to help, you know, name a Navon customer to help Unilever book a flight. Zip just launched a suite of procurement agents last week. I don't know if you saw Penny Pinscher, the agent, great name. We're now going to build building agents alongside them so that when you're using Zip or Brex, you having the agents talk to each other like this is the world.

1:25:41It's going to be the different systems of record, the different softwares interacting and different agents talking to each other. and Brex is at the forefront of that. Agents are huge. AI is huge. This is the future. This is the future. Talking about the future, Brex is the future. What are you most looking forward to in the next year? Next year. I think that what I'm most looking forward to is Brex has spent a lot of time investing in some of the things that we've touched on in the last two hours around our AI push, around our partnership push. And I think that we're just starting to see the momentum flywheel really turn specifically around the bets that we're making in upmarket where, you know, suddenly the procurement person at Coinbase is talking to this other company that then helps us win the deal.

1:26:38There's a real network effect in the business that is really nice to see the tailwinds of. How many rate cuts do you think are going to happen this year? So I think that there's a lot of things going on with the new Fed chair coming in May 2026. So that's about a year away. Obviously, Trump is pretty loud on X and on Trump Social around like pushing rate cuts. But I don't think Powell's going to give in to that. So my gut says two. Two? Two. In terms of the best AI, what's your favorite AI? What do you think the best AI is? So my favorite is ChatGBT. And I think it's going to continue to be the best.

1:27:28I think this is back to a point that we've been hammering, which is distribution. Like they are in everyone's pocket. it. Like people say, I'm going to chat GBT it. Like they don't say, they don't use the other LLMs in that sentence. I think that's super powerful. And so when you have that, that head start and you can do things like acquire talent and builds on that momentum, I think they're going to be the winner. So Cal, she has it at Gemini. I looked into this. Yeah. And the way that they rate these is based on this survey, this specific survey company. Oh, interesting. called LM Arena. They survey off of this.

1:28:07This is their like truth and like resource. Can you like petition, can we like petition this? I think we should petition this. Because that feels like, feels like a really hot take. Because like even Brad Gerstner, Bill Gurley, the KOTU guys, they just came out with the daily usage of ChatGPT. Yeah, I saw that. And it's astronomical. And how it takes away from Google's. It's insane. Users use of Google. Yeah, it's, and it's overtaking social media, which I think is fantastic. I think, I hope, right? Well, hopefully they don't come for X. Hopefully. Well, I think they already surpassed. I don't know.

1:28:41I don't know what happens with that. Like TikToking our brains with ChatGPT, like do you read as much? No, no, I probably don't. But I think the question is, is like, are you using it to acquire knowledge that is helping you? Or do you think it's making you smarter? And is there like some sort of trade-off there? It's like short-circuiting things, But yeah, it's probably not good. I feel like because we're so used to going to that as our source of truth, that we're not as reliant on learning ourselves. We were actually talking about this over the past weekend. Alex Ball. Good plug. Hey, Alex. Brex investor.

1:29:22Love him. He's a Brex investor? Oh, my gosh. Yeah. He's the best investor ever. Ever. He really is. he's invested in so many of the sorcery companies that have come on here but we were all talking about this because the way that we read now like we don't have as much of an attention span to reading as we used to and it's like we're tiktoking or tiktokifying our brains with chat gpt unfortunately so I don't know how we solve that well I use some of those like blocking apps like roots do you ever like for a certain amount of time per day no idea what that is no Yeah, it stops you from going on social media or X or any apps on your phone.

1:30:03So it like bricks your phone for a certain period. Oh, wow. Yeah. So we're going to need that. I think so. Probably. How many Waymo cities are going to... I'm sorry. Waymo is like the funniest name for me, honestly. It's a funny name. It's funny. One time I was talking about... It's very like innocuous. It sounds like a friend. It does, but it also sounds like someone who's like mispronouncing rainbow. So whenever I say it, I think someone's trying to say like Waymo. Waymo. But it's Waymo. Waymo. With an M. Waymo. Waymo. So I'm a big lover of Waymo. You are? Love it. Love the product. And it recently came to Los Angeles, as you probably know.

1:30:47Yeah, it's so sad what they've done to the poor little Waymos. Yeah. Do we know where they escaped to after the downtown incident? No, I think they're probably on like... A spa vacation in Tucson, Arizona. Maybe Joshua Tree or something. Probably Joshua Tree. The dry heat's good for that car. They need some mushrooms. Yeah. What was the question?

1:31:13How many cities do you think Waymo is going to be operating in at the end of 2025? Yeah, so I'm very bullish on Waymo. I think that I love the product, but also it seems like the speed at which they're iterating is increasing. So I'm going to go with six. Six? Six. Why? What cities? So right now it's Austin, SF, Austin, SF, LA. And I think they just continue their push into Texas, Dallas, Houston. Well, they have to like, I mean, think about it. They have to go into like non-socialist cities. Yeah, exactly. There's probably now like in, like when they're deciding the cities, there's like a socialist barometer.

1:32:00Like how many Waymos will be destroyed over a year. Those are expensive. Yeah, they're expensive cars. Very expensive. Probably not Seattle. No, I would say Seattle's probably not going to get Waymos for a long time. The Johnny Ive and OpenAI device, what do you think it's going to be? So there's a little bit inside baseball here. Did you see this morning what happened? What? There was a lawsuit against a company called IO that, uh, or sorry, the company called IO that spun out of Google X is suing John Ives and, uh, uh, OpenAI. And that was a, uh, headphone company, like an earbud company. Ooh.

1:32:38So I think it's going to be an earbud. All right, Art, this is our final question. This is probably the most difficult question I'll give you today. Yeah. Are you ready for this? I'm ready. What do you think the Rotten Tomatoes score for Happy Gilmore 2 is going to be? So let's just take a step back and evaluate this on first principles, okay? Okay. Adam Sandler, one of the most likable people of all time, actors of all time, I would argue. Do you know anyone who doesn't like Adam Sandler? No. Yeah, exactly. There's a lot of sentimentalism around Happy Gilmore, right? Like a whole generation grew up loving the product, the product, the movie.

1:33:15and then you have golf, which is like, I feel like having a major resurgence right now. Huge. So all of that to me suggests that it's going to be above 90%. 90? Yeah. That's my take. Wow. That's pretty good. I feel like with comedies though, and this is where it gets tricky because whenever you make like a secondary, a sequel, they usually don't do as well. I know, but they don't have Adam Sandler. And he's like, but like, he's so commercialized now that he just runs the same playbook for every movie. Sometimes it flops. That's true. Like, yeah, he's run a lot of movies recently. So like, how novel will it be?

1:33:57Will you expect the laughs or will they be unpredictable? Well, I think they'll be expected, but it'll be like, sort of like, you know, the people you knew and loved. They're back. Okay. Like, there's a lot of cameos from the past. I think it's going to be more like, you know how like Gladiator 2 was basically just like control C, control V of Gladiator? I think that's the vibe I'm getting here. But I mean. Nostalgia. Nostalgia vibe, exactly. That's what I'm saying. 90. 90. We'll see. All right. Okay. We'll see. This was a fantastic conversation. We set a new record for sorcery and I can't think of anybody I'd rather do it with than Brex.

1:34:39Brex. And Art Levy. Thank you. This was amazing. Enjoyed the time and happy to come do part two tomorrow. We need to come back for part two. Thank you. Thank you. Hey, it's Molly. If you enjoy our interviews, check out our newsletter, sorcery.vc, where we deliver a once a week top deals and tech headlines email and also go deeper on our podcast interviews. Subscribe to Sorcery today. And don't forget to subscribe to the podcast on YouTube, Spotify, Apple, or wherever you listen. link in description to sign up.