Toronto based Clearco, a provider of fintech capital to online businesses, raised $ 215 million in a round led by SoftBank Vision Fund II. The fundraising event wrapped up just weeks after Clearco finalized its last funding, a $ 100 million round that quintupled its valuation to $ 2 billion.
While the trend for quick funding and follow-up startups is well known these days, SoftBank’s involvement is notable for a meta-reason: A Japanese conglomerate that was once known for its flashy nine-digit VC checks is investing millions. dollars in a company built on a somewhat opposite philosophy: alternative financing that allows founders to avoid venture capital altogether.
And while the co-founders MichÃ¨le Romanow and AndrÃ© D’Souza admit that the two companies are on opposite sides of the spectrum, they also believe that the existence between the two entities led to a closed deal.
âTheir business was to rethink the way venture capital is used,â D’Souza said. âThey saw what we were doing on the other end of the spectrum, which was to use technology for thousands of entrepreneurs, and that’s really what resonated.â
Two years ago, Clearco, formerly Clearbanc, launched the â20 Minute Conditions Sheet,â a platform that has enabled e-commerce businesses to raise non-dilutive marketing growth capital between $ 10,000 and $ 10. million dollars based on its revenue and advertising spend. The founders then opted for rapid deployment of data-driven capital, and to date Clearco has invested more than $ 2.5 billion in more than 5,500 companies.
Over the past year, Cleaco’s message has changed. According to D’Souza, quick, affordable and “unbiased” capital is still a big reason people come into the business, but they are now focusing on the “technical challenge of how to provide personalized advice and support. that you get from a committed investor, board member, advisor, but on a scale of thousands and millions. The product menu followed this energy. Over the past year, Clearco launched ClearRunway to help SaaS founders secure non-dilutive capital repaid through revenue sharing arrangements, a valuation tool, inventory buybacks and ClearAngel, an alternative fundraising platform for founders with minimal income.
Today’s money will be used to help Clearco expand into new geographies beyond Europe, Canada and the United States. Part of its international strategy will include mergers and acquisitions, as imitators emerge in emerging markets. As Clearco has moved from an anti-VC tool to a founder and capital services platform, its stubborn international energy may be what makes it a good deal for SoftBank.
âWe believe we can support a million founders around the world if we can embrace this alternative funding model in every country,â Romanow said. “Masa has a different model, which was to put $ 100 million in 100 companies,” she added, referring to Masayoshi Son, the billionaire at the head of SoftBank. She noted that Son had not spoken for the first eight minutes of Clearco’s speech (which was ultimately the result of her attention, without questioning Clearco’s usefulness).
Despite SoftBank’s previously garish personality, the group’s investment strategy could change. By Nikkei Asia, SoftBank Vision Fund II has an average check size of $ 152 million, well below Vision Fund I’s average check size of $ 931 million. Still, the publication reports that the conglomerate has started to ramp up its investment rate to one new trade per day.
With Clearco’s investment, it’s clear that she believes the venture capital rewrite will include adding options as well.