A hot startup has covered San Francisco with billboards. Here's why the CEO says the ads are worth every penny

Brex

Pedro Franceschi (left) and Henrique Dubugras are the cofounders of Brex.

• San Francisco is covered with billboards for Brex, a startup that provides corporate credit cards to startups. 
• Plenty of startups find opportunities to brag about spending so little money on marketing, but Brex cofounder and CEO Henrique Dubugras says the ads were worth every penny.
• Brex, which has raised a total of $57 million in funding from Peter Thiel and Y Combinator, spent only $300,000 on the ads plastered on bus stops, buildings, and billboards.

In San Francisco, there are few places to escape them.

Jet-black billboards advertising Brex, a startup that offers the first corporate card for startups, loom over the streets and sidewalks. 

The startup appears to have gone all-in on marketing, with posters on bus stops, sides of buildings, and billboards concentrated in the South of Market neighborhood, which is home to many startups.

In a Thursday night fireside chat with Business Insider and Brex cofounder and CEO Henrique Dubugras, a member of the audience asked Dubugras to explain his thinking behind "taking over San Francisco" with billboards and reveal how much the campaign cost.

"How much do you think all those billboards cost?" Dubugras said.

The man guessed between $2 million and $3 million.

According to Dubugras, the billboards cost about $300,000 - one-tenth of the man's guess. The audience let out a gasp.

It made sense for Brex to advertise in the San Francisco Bay Area, Dubugras said, because it's the epicenter of the tech industry. He estimated that 40% of his potential customers - emerging companies without access to traditional corporate cards - grow their businesses here. He wanted the whole city's eyes on Brex.

"The cost per qualified view of a billboard is so much lower than the cost per qualified view on any online display platform," such as Facebook or Twitter, Dubugras said.

Plus, $300,000 was a drop in the bucket for venture-backed Brex. The company has raised a total of $57 million in funding from investors, including Y Combinator, PayPal Mafia members Peter Thiel and Max Levchin, and early Facebook investor Yuri Milner.

To spend or not to spend on marketing

In Silicon Valley, some startups, such as electric scooter-sharing company Bird, find opportunities to brag about spending zero dollars on marketing. They wear it like a badge of honor.

According to Dubugras, entrepreneurs get excited about succeeding without a traditional marketing budget because it shows they found a market for the product. Their popularity grows by word of mouth.

"It proves people are talking about it," Dubugras said. "That's the only possible source that they would be hearing about a product."

Brex took a different approach. The company had a private beta giving select startups the ability to use Brex's corporate card.

"We were very confident of our product-market fit, because even in a private beta, a lot of people were using the card and using their card a lot, and the numbers were just growing," Dubugras said.

"So we had six months of no marketing, and it was working great. Now, we can do marketing, because we're confident that product-market fit exists."

In San Francisco, a few people are having fun with Brex on Twitter: