Brex is a financial technology company offering corporate cards and spend management tools for entrepreneurs. The company features two lines of business, one serving startups and the other catering to enterprise clients. It offers young, fast-moving companies ways to purchase the necessary supplies and tools without the burden of traditional banking setups. It also offers robust analysis and reporting capabilities with a mobile-capable platform for full visibility and flexibility.
Fast-growing companies often grow their tech stacks exponentially to keep the business moving forward. The pace of innovation, and the need to supply teams with the right tools, results in a flurry of buying activity. However, this acquisition pace has costly side effects: expensive contract duplication, underperforming pricing, and contracts signed without proper legal and security reviews.
Brex found itself in this scenario in 2019. In under two years, Brex’s portfolio of SaaS tools had grown from 50 or 70 products to a stack of over 150. Most of the stack was running on month-to-month annualized contracts. Brex’s Chief Accounting Officer, Erik Zhuo, knew they had to streamline the stack and get better pricing on their growing SaaS spend
During the same period, the finance team was working on building more maturity in its accounting practices. With so much time spent focusing on internal processes, adding vendor management and SaaS negotiations presented significant time challenges for a Finance team of three. Erik began considering his options.
Erik’s original plan was to build out an internal Procurement department. Even with a new round of funding and continued business growth, he found it difficult to justify adding headcount to build a separate business function.
Around that time, Erik learned of Vendr through a connection at Y Combinator. The opportunity to save money and free the Finance team from SaaS negotiations with Vendr “was a match made in heaven.” The Vendr team could deliver the spend visibility, hands-on negotiating support, and deal data needed for Brex to achieve its procurement goals. “For us, the ROI on what we would pay for services was very attractive,” explains Erik.
The Vendr partnership offered a smooth transition and a way for Finance to step away from routine procurement work, such as processing renewals. For those deals, it’s a turnkey service.
“They know the negotiation and renewal process. They’re working in the background to get to a contract and amendment quickly,” Erik explains. “When a deal is more involved or requires internal input, Vendr can provide negotiation and support while integrating key stakeholders into the process.”
Brex recognized immediate savings working with Vendr to optimize its stack and improve its negotiation process. Some of the first deals Vendr negotiated on their behalf — large purchases with over 400 license seats — closed within the first quarter and garnered significant savings. During the first year alone, the company realized over $800,000 in software procurement cost savings. Eric now has confidence that their SaaS contracts are fairly priced and competitively negotiated.
The data visibility Vendr brings to the table have helped Erik and the team better understand the SaaS buying landscape. Partnering with a Vendr buyer gives the Finance team insight into good contract practices and education on interacting with new suppliers. “By bringing on Vendr to serve as our procurement arm, we've also evolved in the market,” Erik explains. “We’ve done a better job tracking our spend across vendors, anticipating renewal dates, and becoming more structured and organized in that process.”
This expertise, Erik says, is especially valuable for startups navigating the market while they grow. “Many finance professionals may not have worked in FinTech or a tech startup before. They may have come from a traditional background and haven’t seen what pricing should be for these services.” With Vendr as support, everyone can get on the same page.
Using the platform and Vendr buyer support has freed Erik and the team to focus on internal operations and goals. Where he’d previously spend five to 10 hours a week tracking procurement issues and handling renewals, he now stays up to date on deals with a quick bi-weekly progress call. With the time saved, he can focus on strategic initiatives for the Finance and Accounting teams within Brex.
Brex implemented Vendr as an extension of procurement, helping the company to streamline its 150-tool tech stack and save $800k within the first year.
- Early SaaS buying led to a tech stack with limited visibility or cost savings.
- Their three-person team needed procurement support to free up time.
- Vendr helped Brex achieve cost savings while expanding its SaaS market knowledge.
San Francisco, CA