Clearco has secured $268 million CAD ($215 million USD) in a new round of equity capital led by SoftBank Vision Fund 2.
The round, which comes mere months after Clearco raised $125 million CAD of equity financing, accelerates the company’s international expansion plans and overall roadmap by at least one year.
“What we’re starting to realize is that we’ve found real product-market fit and real demand.”
The investment marks the first SoftBank has made in a Canadian company through its Vision Funds. The round was made up of entirely new investors, as it also included Intuit, Bow Capital, and Park West. Clearco declined to disclose the amount of secondary capital involved in the round or its new valuation.
SoftBank, which operates the largest venture funds worldwide, brings a notable network to help Clearco meet its goal of becoming a global company.
“[Having SoftBank as an investor] allows us to dream a little bit bigger and have confidence that, as we need funding, as we need more resources, we’ve got a really powerful global investor,” said Clearco co-founder and CEO Andrew D’Souza.
“They’ve got a fantastic global network, they’ve got the expertise, they’ve seen companies grow globally, they’ve seen companies … expand internationally,” he added. “So, just leaning on them for that expertise, that network, and that support allows us to be a little bit more confident as we execute our own plans.”
Since securing a Series C round earlier this year that made Clearco a $2 billion unicorn, the company has been focused on growing its global presence. It currently has operations in the United States, Canada, the United Kingdom, and the Netherlands.
With new capital, Clearco has also added new executives to make its financing products and services for entrepreneurs available in more European countries and Asian Pacific markets by the end of this year.
Clearco’s chief growth officer, Ruma Bose, joined the startup earlier this year and has been leading the geographic efforts. Clearco also recently added Sarah Clark as its United Kingdom lead, Satwick Seshasai as chief technology officer, and VP of product, Katrina Shackelford, who joins from Amazon.
The focus on global expansion also came along with a re-brand from Clearbanc to Clearco, which reflects a move beyond the company’s investing roots to providing a full-stack founder support platform.
Clearco’s products now include revenue-share financing; 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.
“What we’re starting to realize is that we’ve found real product-market fit and real demand,” said D’Souza. “We’ve seen versions of Clearco start to emerge in international markets, so we’re starting to look at, do we enter those markets [or] buy those companies, we are looking at all of that stuff.”
“We are starting to think a little bit more aggressively around bringing our offerings to more founders,” the CEO said. “We’ve backed 5,500 founders with $2.4 billion so far, but we’re not going to stop until we hit one million. There are a lot of entrepreneurs around the world who need access to the opportunities that we can provide.”
Of the 5,500 businesses Clearco has invested in, 30 percent are led by black, indigenous, and other people of colour (BIPOC) founders. Clearco says its capital also has supported eight times more women-led businesses than traditional venture investors. The company attributes the increased funding support for underrepresented entrepreneurs to its proprietary AI-driven platform.
That support for overlooked entrepreneurs was part of the impetus for launching Clearco. Co-founder and president Michele Romanow recently spoke to that during the June Patreon-exclusive BetaKit Live event, titled ‘Canada’s FinTech Unicorns.’
“What we were seeing is that huge parts of the economy have always been overlooked by the conventional finance system,” she said. “And that has been true in nearly every economy in the world. We came up with the name Clearbanc with the theme to make financial services better for people.”
“Clearco is a market leader who has created an entire industry that is fiercely dedicated to democratizing access to capital and a full suite of services that serve the founder journey,” said Kristin Bannon, director at SoftBank investment advisers. “We’re excited to partner with Andrew, Michele, and the Clearco team as they aim to transform the e-commerce industry.”
“We built the segment,” said Romanow. “I mean, no one, literally no one believed in this sector of the economy. Before we existed, the only options that existed for founders were to go to a bank and give up a personal guarantee and put your whole life or your house on the line to build your business, or go to a VC. There was no revenue share, non-personal guarantee option, in the middle, that existed. And so, we figured out that that was possible and built that up, and now we want to own that around the world.”
The latest round led by SoftBank brings Clearco’s total equity funding to date to $480 million CAD. The company is also backed by more than $1 billion in debt facilities that allow it to make its revenue-share investments.
To meet these objectives, Clearco is aggressively hiring. The company currently sits at 378 employees. With plans to more than double that number over the next year.
Acknowledging Clearco’s ability to secure substantial financing from investors to meet its scaling goals, D’Souza emphasized those opportunities are not always available to early-stage startups.
“Early-stage entrepreneurs, they still struggle when they do raise money … it’s still a challenge to get your foot in the door and get those meetings to get those pitches,” D’Souza said. “So, I think that’s really what we’re aiming to bridge. Instead of it just being more and more capital available to the people that would have already gotten the capital, can we level the playing field a little bit and equalize the opportunity for more and more founders globally.”