Clearbanc rebrands, raises $350 million USD to provide full-stack founder support
With fresh capital and a new name, Clearbanc has moved beyond its investing roots to become a full-stack founder support platform.
The Toronto-based startup has secured $125 million CAD ($100 million USD) of equity financing and $313 million CAD ($250 million USD) in debt to fuel its growth. The Series C round also makes the company Canada’s newest unicorn, with a reported valuation of close to $2 billion USD.
Emphasizing its move beyond equity-free investing, the company has also removed the ‘bank’ reference from its name and re-branded to Clearco.
“We started to realize that the capital and funding is one part of a relationship that we can have, but we can actually think about this as a much bigger, much bigger platform,” Clearco co-founder and CEO Andrew D’Souza said in an interview.
Clearco was launched in 2015, and since that time has provided $2 billion USD in financing to more than 4,000 companies. Clearco provides growth capital in the form of revenue share agreements that see the recipient paying back an agreed-upon percentage of their revenue until the principal plus a flat fee is fully repaid.
The company initially focused on B2C e-commerce businesses, but over the last year has expanded into new verticals and products to support the broader entrepreneurial journey. Clearco’s products now include a valuation tool; ClearAngel, which provides companies at the earliest stages revenue-share funding and support; an inventory program, whereby Clearco purchases inventory directly from suppliers; and a Venture Partner Network, which launched in 2019.
Speaking with BetaKit, D’Souza and Clearco president Michele Romanow noted the company has more product launches planned for this year.
D’Souza said the decision to expand Clearco beyond financing came about through conversations with its portfolio companies. “A lot of people came to us around valuation and to understand how their business is growing day over day, week over week, and what they can do to improve that,” he said.
The $125 million CAD in equity financing brings the company to a nearly $2 billion valuation. The round was led by United States venture growth-equity firm Oak HC/FT, with participation from new investors Founders Circle and eInvestors. Clearco’s major existing investors also participated in the round, including Highland Capital Partners, Inovia, and Emergence Capital. A number of angel investors also participated, including executives from Stripe, Square, Affirm, Adyen, Robinhood, Betterment, Airbnb, Hubspot, and Apple.
The $313 million in debt came from specialty finance company Credigy, a subsidiary of National Bank. According to Clearco, the debt came at a “significantly lower cost of capital” than previous financings, allowing the company to offer more competitive rates to its growing portfolio “than any pay as you grow financing company in history.”
Clearco also claims that with its current debt facilities, it has the capacity to provide more than $2 billion a year in financing to companies.