Clearco has raised $215 million from SoftBank’s Vision Fund 2.
The Toronto-based fintech start-up, formerly known as Clearbanc, plans to use its latest round of funding, led by Softbank with participation from Bow Capital and Park West, to expand internationally to the U.K., Europe and Asia.
“We know there’s a ton of amazing brands and founders around the world that have less developed venture capital ecosystems that have the same problem with banks where they want personal guarantees,” said Michele Romanow, who cofounded Clearco with Andrew D’Souza.
The investment will also help Clearco with product development; the company is known for its “20-minute term sheet,” which estimates how much capital a company qualifies for based on the apps it uses to run its business.
“When you become part of the critical portfolio, we are providing you with insights and benchmarks, what your valuation is so you understand what your business is worth and what you could do to drive that valuation,” Romanow said. “We’re providing you with networks and connections to the ad agencies or suppliers that you might be next and we’re giving you a coach as part of the process to help continue to grow your business.”
To lead its international expansion, Clearco has appointed Ruma Bose chief growth officer and Sarah Clark head of U.K. Later this month, Satwik Seshasai will join the company as chief technology officer, and Katrina Shackelford will join from Amazon to be Clearco’s vice president of product.
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Clearco has invested more than $2.4 billion in 5,500 companies, including Andie Swim, Blume, Vanity Planet and Jenny Bird, since its inception. About 30 percent of Clearco’s founders identify as Black, Indigenous or people of color, and it estimates it has funded eight times more female-led businesses than traditional venture capital companies.
“A venture capitalist needs a company to IPO and 10x or 100x [its business], so they’re always looking for those businesses that have that potential to go big or bust,” D’Souza said. “Our model is, we want to invest in every founder and our upside in every investment is capped at 6 percent. We’ll give you $100,000 to spend on marketing or inventory, we’ll take a share of revenue until we get $106,000 back, and we continue to do that at bigger and bigger scale as those companies grow.”
During the COVID-19 pandemic, many businesses were forced to shift online, especially if they weren’t already. Now, with some countries lifting COVID-19 restrictions, companies are strategizing about their post-pandemic omnichannel approach, D’Souza said.
“The best brands are advertising wherever the customers are able to purchase and experience the product,” he said. “Direct-to-consumer brands are creating their own physical locations. We’re starting to see the acceleration of the showroom-ing concept, particularly for fashion brands. People are going in to try things on, but if they need another style, size, color, they can get that ordered or shipped to them. It’s a very seamless experience.”
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