Canadian-founded, New York-based AI startup Clay closes $63-million CAD Series B

Clay, a Canadian-founded, New York, NY-based artificial intelligence (AI) startup focused on sales and marketing for businesses, has secured $46 million USD ($63 million CAD) in Series B financing to fuel its growth.

The all-equity Series B round was led by Meritech Capital with support from existing backers, including Sequoia Capital, First Round Capital, Box Group, and Boldstart Ventures. It brings Clay’s total funding to $62 million USD ($85 million CAD) and gives it a $500-million USD post-money valuation.

Maple VC general partner and longtime Clay investor Andre Charoo told BetaKit that Clay’s progress was attributable to “a combination of the founder’s big ambition, unwavering patience, and courage of narrowing their focus to find the right use case to start.”

“It’s the first of many that proves the Maple strategy of backing Canadians building in America will lead to the most important companies in tech.”

The company was launched back in 2017 by two McGill University graduates and repeat entrepreneurs, Nicolae Rusan and Kareem Amin. Rusan is Canadian, while Amin—who is originally from Egypt—came to Canada to attend McGill before moving to the United States (US). Over a decade ago, the duo went south of the border to work in tech and build another New York startup together called Frame, an e-commerce tech firm they sold to Sailthru in 2012.

“We originally moved to Seattle to work for Microsoft and then moved to New York City because we loved the energy [and] there are more opportunities for funding,” Amin, Clay’s CEO, told BetaKit.

Asked whether the investment landscape at the time played a role in their decision to build Clay in the US rather than Canada, Amin said, “Yes, the macro environment and attitude matter a lot in fundraising, and San Francisco and New York are the two best places to do it.”

Clay initially aimed to make computer programming more accessible. Charoo noted that in late 2021, Clay narrowed its focus to automating sales and said “this turned out to be the big unlock.” Around that time, the company brought on Varun Anand as co-founder and head of operations. Per Amin, Rusan left Clay in 2022 to pursue other interests and launch another business but remains involved with the company at the board level.

According to Amin, today, Clay competes largely against the manual customer research and personalized outreach that sales and marketing teams conduct. Using AI, Clay aims to help companies automate that work and implement and execute growth strategies more efficiently “without huge investments in tooling or manual labour.”

“With Clay, a single person can now run campaigns—whether outbound, inbound, expansion, or retention—that previously required co-ordinating the entire [go-to-market] team,” Amin said.

Clay launched its platform on tech product launch and discovery platform Product Hunt in early 2022 with a team of less than 10 employees. Since then, Amin said that Clay has grown to more than 50 employees, 100,000 users, and 2,500 customers.

“We’ve grown revenue 10x each of the past two years, and Clay has quickly become the default growth engine for the world’s most innovative teams, including Anthropic, Intercom, Notion, and Vanta,” Amin claimed.

Clay plans to use its latest capital to expand its engineering and go-to-market teams. Though Clay does not currently have a Canadian presence or plans to grow here with this round, Amin expressed interest in working with the country’s engineering talent in the future.

Led by Charoo, who was born and raised in Canada, San Francisco-based Maple VC is Clay’s only Canadian investor. The early-stage venture capital firm, which focuses on Canadian entrepreneurs building in the US, wrote its first cheque into Clay back in 2017 through its first fund.

In a blog post outlining Clay’s journey to date, Charoo noted that the startup meshed with Maple VC’s thesis: “We noticed that Canadian expats in the US, who graduate from Canadian universities (ie. U of T, Waterloo, McGill, Queen’s, UBC, and more) go on to build some of the biggest companies across every category in tech—Uber (where [Charoo was] employee #25), Slack, Instacart, Notion, Faire, Ethereum, Databricks, Cloudflare, Roblox, and most recently, OpenAI.”

“The most durable companies take a long time to build, and I believe we’re witnessing one in the making with Clay,” Charoo told BetaKit. “It’s the first of many that proves the Maple strategy of backing Canadians building in America will lead to the most important companies in tech.”

Feature image courtesy Clay.