Toronto-based Clearco has launched a $50 million USD fund in partnership with Caravan to provide non-dilutive capital to businesses looking to use the power of celebrities to accelerate their growth.
“CAA’s roster of talent will allow us to match our founders with celebrities who can become partners and help accelerate the growth of their brands.”
The new fund is part of a partnership between Clearco and Caravan, the latter a venture of Creative Artists Agency (CAA), an entertainment and sports company. Clearco’s partnership with Caravan will see the two companies provide resources to Caravan portfolio companies as well as explore opportunities to connect existing Clearco founders with celebrities that could accelerate their growth.
“We are always looking for new and unique ways to give founders not only the capital they need to scale, but the products and services they may not have been able to access without support,” commented Andrew D’Souza, co-founder and CEO of Clearco. “CAA’s roster of talent will allow us to match our founders with celebrities who can become partners and help accelerate the growth of their brands, without founders sacrificing ownership or equity.”
The fund has already deployed its first investment into a wellness and fitness company backed by entertainer and entrepreneur Carrie Underwood. According to Forbes, fit52 has raised $12 million from investors to date.
Clearco, formerly known as Clearbanc, aims to support founders through a wide array of solutions and services, including financing. The Toronto-based company finances entrepreneurs through a revenue-share model, which sees Clearbanc fund companies in exchange for a cut of a business’s future revenues.
Clearco does this through raising large amounts of debt financing, with its last debt raise totalling $313 million CAD. The $50 million for the new Caravan fund comes from Clearco’s existing pool of debt facilities. When raising its $313 million in debt financing, Clearco also secured $125 million CAD in equity funding, which gave the company a unicorn valuation of over $2 billion.
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Through its financing model, Clearco has several targeted investment vehicles, including an $853 million CAD (£500 million) fund when it expanded to the United Kingdom and a $10 million fund dedicated to companies at the earliest stages of their growth.
Clearco has deployed more than $2 billion to more than 5,000 e-commerce companies and services since 2015.
Over the last year, the company has rolled out a number of new products for portfolio companies, including a valuation solution and an inventory financing model. The company has also sought to take its model to new markets as of late, this year adding a new chief growth officer, Ruma Bose, to lead the company’s efforts to become a household name for entrepreneurs globally.
Clearco’s alternative approach to startup funding has put it in competition with other notable tech firms. In 2016, Shopify launched Shopify Capital, which provides merchants with loans to fund their operations and growth. Amazon and PayPal also offer working capital loans based on a revenue-share model.
Clearco’s fund with Caravan will use Clearco’s revenue-share model, which is notable as Caravan typically takes equity from its companies.
Image source Clearco.