Estate settlement startup ClearEstate has secured a $16.8 million CAD ($13.25 million USD) Series A funding round. OMERS Ventures led the round, with participation from Diagram, Torstar and NAVentures. The latter is the corporate venture capital arm of the National Bank of Canada. A number of undisclosed angel investors also took part.
In the next six months, the startup plans to expand to Florida, New York, Texas, and some adjacent states. ClearEstate plans to use its new funding, which closed mid-December, to increase its team from 50 to more than 120 by the end of 2022.
The startup is looking for “empathetic, diligent and forward-thinking” employees.
Why empathetic? Because early on, ClearEstate discovered a pure SaaS model wasn’t working. “We pretty rapidly realized that in our space, this kind of pure SaaS play is not viable because people are not there from an emotional standpoint,” ClearEstate CEO and co-founder Davide Pisanu told BetaKit.
Understanding that, ClearEstate changed its model early on, and adjusted to have agents available to assist people with the platform. “It’s a lot of hand-holding,” Pisanu said. ClearEstate’s platform can be self-serve, but the startup found that 95 percent want human support through their customer journey.
“People are grieving and people need the human connection,” Pisanu explained. “They need access to a professional.”
“We pretty rapidly realized that in our space, this kind of pure SaaS play is not viable because people are not there from an emotional standpoint.”
– Davide Pisanu, ClearEstate
ClearEstate describes itself as a family finance hub, and claims that it can save executors approximately 120 hours of their time, and $8,500 in fees. The startup offers estate planning in advance, professional executorship services, and bereavement benefits packages.
Shawn Chance, a partner with OMERS Ventures, joins ClearEstate’s board as part of the Series A. “As part of Canada’s largest pension plan, we can offer a unique perspective on the needs of aging populations and the organizations and industries that serve them,” Chance told BetaKit.
“We have been studying ‘age-tech’ broadly for the last few years and are able to draw on unique insights from OMERS’ 500K plan members,” Chance added. “End-of-life products including estate planning and settlement deserve more thoughtful solutions. From the moment we met Davide and his co-founders, we knew they were the right team to build this platform.”
The funds will also go toward helping the platform adjust to each jurisdiction. Trusts and estates don’t work the same way in different states, Pisanu noted. Because of that, Pisanu said that every time the startup expands it needs to make sure the platform is up-to-date, and that the team is ready to handle the needs of customers.
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“The complexity of the operations and of the multi-jurisdictional aspect of our business is the real challenge for us in the next 18 months,” he noted.
ClearEstate is a B2C company that Pisanu claims is currently bringing in 70 to 80 estates a month, and will grow to 300 estates a month by the end of the year. Currently, it operates in Canada, California, Arizona, and Nevada.
As part of the startup’s expansion, it plans to add a suite of financial services around its core platform. Pisanu suggested the new services could encompass such things as wealth management, wealth advisory for beneficiaries, and integrating estate bank accounts with the platform.
So the new features would be designed in-house, while others could be done in partnership with a FinTech company. “We don’t need to reinvent the wheel,” Pisanu said.
Pisanu co-founded ClearEstate in 2020 with CPO Alexandre Gauthier following Gauthier’s challenges settling his late mother’s estate. The startup worked on developing its platform, figuring out its operations, and attracting clients in 2020 to 2021, according to Pisanu, who added that “2022 is really a scaling game.”
ClearEstate has raised $21 million to date. The startup raised $1.7 million in a seed round in the fall of 2020, and followed that with a $2.5 million seed extension in 2021.
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When it comes to competition, Pisanu doesn’t see a whole lot in the digital world. He referred to Willful as a “will generator,” and claimed ClearEstate offers a more comprehensive end of life planning estate administration. “There’s always going to be room in the market for people like Willful,” he said, “people that are in need of a templated will, but we’re not going after the same clients.”
However, Willful has previously said that it is looking at a product to compile and store other information, such as asset lists, and funeral and burial wishes with hopes to launch something along those lines this year.
ClearEstate views its competition as lawyers, accountants, and trust offices. “The people that we lose clients to today are mailing local professionals, not any true digital platforms,” Pisanu said.
He noted three million people die every year in North America. “Our model is not a pure business repeat model, but death unfortunately happens every year in a pretty systemic way,” Pisanu concluded. “It’s quite a big market, a growing market because of the aging population.”