This is the unusual story of a coronavirus-era company. It was founded, raised money and then was sold in a very short time, all during the global pandemic, and all on Zoom.
“In April 2021, we informed the world that we had raised $4.3 million,” said Nadav Lidor, co-founder and CEO of the startup Weav. “One month later, talks about a sale began.”
At the end of a swift negotiation, a deal was signed, and the company has just announced its sale to American fintech giant Brex for $50 million – more than 10 times the initial investment, and in a very short time. Some of the purchase price is in cash and some in stock.
Following the sale, Brex will set up a development center in Israel that will employ dozens of people, Lidor said.
Lidor fits the standard model of an Israeli tech entrepreneur. He served in the army’s military intelligence Unit 8200 and studied abroad afterward. “I did a degree in computer science at Stanford and then returned to Israel and worked at Google and Microsoft,” he said.
After a few years of working for big tech companies, he decided to become independent. “At some point, we thought it was time to have an adventure,” he said of the decision to found a startup. He was 28 years old at the time.
When he said “we thought,” he was including his two partners – Avikam Agur, whom he knew socially, and Ambika Acharya, the American daughter of Indian immigrants, who had studied with him at Stanford. They decided to do “something” together, but didn’t know what.
“I knew these were people I had fun being with and I wanted to work with them,” he said. “But at that time, I was living in London, Avikam in New York and Ambika in San Francisco. We met in California for a few weeks, but then the coronavirus began and we scattered around the world. I returned to a quarantine apartment in Jaffa and Avikam returned to New York.”
But the desire to work together remained. “So despite all the chaos of plunging stock markets and closed borders, we continued having daily meetings on Zoom, when it was night here and morning in San Francisco,” Lidor said.
They discussed several different ideas before settling on one in fintech. “We decided to found Weav. The company builds application programming interfaces that enable businesses to send their information to a bank or fintech company so that they can assess risks and provide financial services for the business.
“It’s mainly suitable for small businesses – say, this café we’re sitting in,” he continued. “Its cash register is already digital; modern businesses use digital tools like Square or Stripe. But this information isn’t accessible for use by third parties, and to assess risks, the bank has to rely on data from the business.
“Today, this whole process is done manually and takes a long time. So we connect to systems like these and enable the businesses to share the information from these systems with the financial institutions, which are our customers.”
Asked why they called the company, Weav, Lidor answered, “the name Weave sounded cool to us, but the domain that was available was without the ‘e.’ In the end, we bought it and that became the company’s name.”
Essentially, Weav connects with all of a company’s other software, including human resources, bookkeeping, inventory and, of course, commerce platforms like Amazon and Shopify. This enables Weav to show financial institutions the company’s situation in real time so that the institutions can, for instance, determine the company’s credit line or set terms for a loan.
In the future, Weav also plans to connect with apps like Instagram and Google so it can track the company’s advertising expenses.
Weav was founded in the midst of the pandemic, in July 2020, entirely via Zoom. Conversations with investors also took place on Zoom, aside from those with its only Israeli investor, Amit Avner, who met with Lidor in person.
Weav’s solution is a natural fit for fintech companies that provide funding to small businesses and are hungry for data to improve their models. Among the company’s first customers were the French neobank Qonto and the American neobank Brex. Weav says that since it launched its product in early 2021, use of the product has grown by around 300 percent every month.
The buyer, Brex, is a poster child of the global fintech industry. It was founded in 2017 by Henrique Dubugras, who is originally from Brazil and is currently just 25 years old. In April, Brex raised $425 million, an investment that valued the company at $7.4 billion. Now, it is turning from one of Weav’s early customers into its purchaser.
Asked about his decision to sell, Lidor said, “When you set up a company, you think long-term, and therefore, we also did a financing round. But what was significant for us was the identity of the buyer. These are people we knew personally, and we were impressed by how they operate swiftly as a global company. We can integrate Weav into Brex’s solution and expand our package of financial options to businesses.”
As of today, Weav has just nine employees. But it is now slated to become Brex’s Israeli development center and hire additional talent. Lidor will be CEO of the Israeli center.
Brex, he said, “is a company that espouses remote work. But in some countries, they opened a workspace for those who prefer to come to the office, and that will be done in Israel, too.”
Dubugras said the global competition over exceptional talent has made Israel a key locale for many companies, thanks to its human capital and its impressive technological ecosystem. Brex, he added, was one of the first companies to adopt the remote work model and sees this as the best way to grow on a large scale despite the limitations imposed by the coronavirus.
“After a successful partnership, we are thrilled to make Weav part of our core team,” Dubugras continued. “Weav’s technology helps make Brex even better for our customers.”