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Sunday, November 27, 2022

Clearbanc rebrands its way into a unicorn. The fintech company raises a $100 million Series C

After providing non-dilutive funding for founders for five years, Clearbanc is sick of being just a bank. As a result, it is rebranding and has recently acquired $100 million in Series C funding at a $2 billion valuation based on its larger objectives. When Clearbanc closed its Series B in 2019, the valuation was five times lower than it is now.

According to co-founders Michele Romanow and Andrew D’Souza, Clearbanc has changed its name to Clearco to reflect better the company’s long-term goal of offering data-driven solutions for entrepreneurs.

Know about the success story

The 20-minute term sheet, which Clearco structured itself around just two years ago, is no longer relevant in today’s news. The product, possibly its most well-known in the tech industry, allows e-commerce businesses to raise non-dilutive marketing development capital between $10,000 and $10 million based on revenue and advertising expenditures. The founders then used data-driven rapid capital deployment, and Clearco has since invested more than $2 billion in more than 4,600 businesses.

Product launches of Clearbanc

Over the past year, Clearco has launched a tonne of new products. Clearco introduced ClearRunway in April 2020 to assist SaaS startups in obtaining non-dilutive funding through revenue-share agreements. A few months later, in July, it introduced a method for founders to determine how to value their businesses using internal analytics and benchmarking data.

In October, Clearco introduced a tool that would buy a business’s inventory in advance from suppliers and be repaid as items are sold. In February, the company declared that it had developed Clearangel, a product comparable to its 20-minute term sheet but targeted at founders who generate less money.

There have been difficulties along with the growth. Clearco fired 17 employees, or 8% of its workforce, in April 2020, the same month it introduced ClearRunway. The business announced that it would be issuing more regular, cautious checks. It gave $2,200 businesses $1 billion at the time. It has now distributed $2 billion to 4,500 enterprises, including startups and online companies.

Things you should know about Clearbanc.

The business, which is still not profitable, declined to provide ARR, instead citing another proxy: Clearco earns 6% in fees on all of its capital products when reimbursed. Clearco invested $1 billion in its businesses last year. This indicates that Clearco made sales of almost $60 million last year.

Clearco had “very, very high loss rates,” but it has improved with time and additional data. The corporation increase its focus on various channels for gathering, shaping and communicating that data. Since its founding in 2015, growing the capital market portion of its operations and ensuring that it constantly had money on hand have been Clearco’s significant challenges. The new product suite will present Clearco with its most important challenge yet.

Even if many of Clearco’s newest products are still in their infancy, the firm’s future success may be related to the expansion of businesses seeking alternatives to venture money for startup financing. Like Clearco’s growth is related to the development of entrepreneurs who view financing as going beyond a seed check from Y Combinator, AngelList’s growth is associated with the change of emerging fund managers.

Final thoughts

The National Crowdfunding & Fintech Association (NCFA Canada) is a financial innovation ecosystem that works closely with businesses, the government, partners, and affiliates to develop a thriving and forward-thinking fintech and funding sector in Canada. It offers education, market intelligence, industry stewardship, networking opportunities, and funding opportunities and services to thousands of community members.

Decentralized and dispersed, NCFA collaborates with international stakeholders and supports the development of projects and investments in fintech, alternative finance, peer-to-peer lending, payments, digital assets and tokens, blockchain, cryptocurrency, regtech, and insurtech sectors. Join the Fintech & Funding Community in Canada for FREE or join and contribute to receive benefits.

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