A month after raising $92 million, Toronto-based Clearbanc has announced an additional $50 million ($67.28 million CAD) in funding.
Clearbanc, which provides funding to support entrepreneurs’ marketing activities, received the funding from Seamless (now GrubHub) co-founder Jason Finger’s new fund, Upper90. Clearbanc said that Finger offered the $50 million after seeing that over the past four weeks, over 1,000 companies have requested up to $1 billion in capital from the company.
“Clearbanc is revolutionizing the way that ecommerce brands access growth capital,” said Finger. “So often businesses raise dilutive capital for marketing expenses that can be financed far more effectively through channels like Clearbanc. The efficiency of their funding process enables entrepreneurs to maintain the focus necessary to build world-class businesses. I think every company should first explore this form of capital as a fundraising best practice.”
“The efficiency of [Clearbanc’s] funding process enables entrepreneurs to maintain the focus necessary to build world class businesses.”
– Jason Finger
In November, Clearbanc co-founder Michele Romanow told BetaKit that Clearbanc has shifted from being a financial services platform for entrepreneurs to a company that provides funding to entrepreneurs to support their marketing activities.
“I built the product that I wanted to have as an ecommerce entrepreneur,” Romanow said. “I wish we would’ve had this when we were building Buytopia.”
Clearbanc provides funding ranging from $5,000 to $10 million. As the platform focuses on ecommerce businesses, the money is meant to go towards marketing spend and customer acquisition. Clearbanc uses data from platforms that client companies use, such as Facebook and Stripe, to evaluate financial health and revenue trajectory.
According to a report by The Globe and Mail, Clearbank CEO and co-founder Andrew D’Souza said the funding will be used to create a two-year $50 million fund that the company can draw from to finance its ecommerce customers. Clearbanc will manage the fund, and take an upfront management fee plus a share of the returns the fund earns from financing Clearbanc’s customers. D’Souza said he expects to deploy the money four times over the fund’s two-year life.
Along with the funding, Clearbanc has also appointed Rajen Ruparell, co-founder of online mattress brand Endy, and Keri Findley, a former partner at the $17 billion hedge fund Third Point, to its board.
“After successfully growing Groupon into a global, multi-billion dollar company, Rajen has built some of the most successful direct to consumer brands, and backed some of the world’s most successful startups,” D’Souza said. “His experience, combined with Keri’s incredible mind for Capital Markets, is exactly the combination of expertise we need to completely rethink how entrepreneurs access capital globally and create a new asset class along the way.”
Clearbanc said it plans to launch additional growth capital products, secure new partnerships, and expand internationally in 2019.