Pay as you grow financing pioneer nears US$2B valuation
Proprietary AI-driven platform has funded 8X as many female founders as typical VC; 30% of funded founders are people of color
Clearbanc, the world's largest e-commerce investor and the company revolutionizing the way founders grow their businesses, today announced a rebrand and $100M in new Series C equity funding to fuel the company's ambitious growth plans, bringing the company's valuation to almost $2B.
To reflect its evolution from a source of efficient capital for founders to a broader platform of growth products and services, the company is rebranding as Clearco. With proprietary algorithms that are gender-, race-, and region-agnostic, Clearco is unique in its commitment and ability to fuel entrepreneurship outside of traditional networks and regions. While global VC funding for female founders dropped by 27% in 2020, according to Crunchbase, Clearco funded eight times as many companies headed by female founders as traditional VC firms. In that same timeframe, 13% of Clearco's funding went to companies headed by Black and LatinX founders, compared to 2.6% for traditional VC firms; in total a third of Clearco funding went to founders of color.
"The move from Clearbanc to Clearco really signals our move beyond capital," said Co-Founder and President Michele Romanow. "We've invested US$2 billion in 4,500 plus companies, and we're building a product suite to support founders that goes far beyond funding, based on what they've told us they need most. Our new name reflects our broad commitment to partnering with founders to build thriving businesses."
In addition, Clearco's algorithms "spread the wealth" geographically. While 80% of typical US VC funding last year went to four states that have traditionally been tech hubs (California, Texas, New York and Massachusetts), Clearco's total for those states was 45% with 55% going elsewhere. Clearco has funded companies in all 50 US states and all ten Canadian provinces and three territories, as well as the UK, where to date 70% of funds have gone to companies located outside London.
"Our goal is to change the face of fundraising, and we're really proud to be showing it can be done," Romanow said.
To fuel these plans, Clearco raised US$100M of equity and US$250M of debt in a Series C round that takes the company's valuation to nearly $2B. Oak HC/FT led the round and Co-Founder and Managing Partner Annie Lamont will join the company's Board of Directors. Lamont has appeared on the Forbes Midas List and has been a VC and investor for more than three decades. New investors include Founders Circle and executives from Stripe, Square, Affirm, Adyen, Robinhood, Betterment, Airbnb, Hubspot, AirWallex and Apple. The new debt comes from Credigy (a National Bank subsidiary) at a significantly lower cost of capital, allowing Clearco to offer more competitive rates to its growing portfolio than any pay as you grow financing company in history. To date, Clearco has raised over US$170M of equity.
"With US$2B deployed to more than 4,500 founders, we've proven that we can find and fund entrepreneurs using machine learning and AI in a much more egalitarian way, and we're gratified that the investment community sees that," said Co-Founder and CEO Andrew D'Souza. "We're also excited to welcome Annie to the Clearco Board. Her 30 years of business and investor experience make her the ideal person to join us at this inflection point and work with our executive team to grow our business and brand."
"Oak HC/FT is thrilled to partner with the market leader in the alternative funding space," said Lamont. "We strongly believe in Clearco's mission to democratize access to capital, and we're excited to see this next phase of growth."
Clearco now offers an industry-leading suite of performance financing products and services tailor made to help founders retain ownership including:
- ClearCapital for ecommerce founders – Clearco's signature 20-minute term sheet offers marketing growth capital from $10K-$10M for growing ecommerce founders.
- ClearInventory Capital – Clearco will buy your inventory, then you pay it back as it sells through for cost + 6%. This allows founders to pay as they grow.
- ClearRunway for SaaS Founders – Uses data science and real business metrics to get access to up to 24 months of future revenue at a discounted amount today. Fund growth, extend runway, and expand faster to get a higher valuation, keep equity, and stay in control.
- ClearValuation – Advanced data science expands Clearco's product beyond capital, providing a free valuation to founders and insights and recommendations to increase their company's value and connect with investors and M&A buyers.
- ClearAngel – ClearAngel gives early stage founders (with as little of $2K of monthly revenue) access to revenue share capital, data-driven advice, and Clearco's extensive network of apps, agencies, and investors.
"Recovering from the COVID-19 pandemic will take all of our best minds. Clearco supported founders right from the start of the pandemic and looks forward to accelerating this support," said D'Souza. "We're proud that the technology we've developed is identifying promising businesses regardless of who the founder is or where they live, and we look forward to working with them to get the world's economy back on track."
Co-founded as Clearbanc in 2015 by Michele Romanow from Canada's Shark Tank (Dragons' Den), Andrew D'Souza, Ivan Gritsiniak, Charlie Feng, and Tanay Delima, Clearco offers the most founder-friendly capital solutions for e-commerce, mobile apps, and SaaS founders as well as a full suite of products and access to a powerful global network, insights and data, and recommendations. Clearco has financed over 4,500 companies to date, including Leesa Sleep, fashion-rental service Le Tote, home goods company Public Goods, shirtmaker UNTUCKit, online speech therapy practice Expressable, and digital real estate marketplace SetSchedule. For more information visit clear.co and @getClearco.
About Oak HC/FT
Founded in 2014, Oak HC/FT is the premier venture growth-equity fund investing in Healthcare Information & Services ("HC") and Financial Services Technology ("FT"). With $3.3 billion in assets under management, we are focused on driving transformation in these industries by providing entrepreneurs and companies with strategic counsel, board-level participation, business plan execution and access to our extensive network of industry leaders. Oak HC/FT is headquartered in Greenwich, CT, with offices in Boston and San Francisco. Follow Oak HC/FT on Twitter, LinkedIn, and Medium.