Raising a $50 million-plus funding round is something many companies can only dream of. Clearbanc has done it twice in the last 40 days.
According to a report from TechCrunch, the Toronto-based Clearbanc has raised a new $50 million USD funding round from Upper90. This adds onto a $70 million USD round raised in mid-November. In total, this deal took a reported 17 days from start to finish—a testament to Clearbanc’s business model.
Clearbanc, founded by Dragons’ Den star Michele Romanow and Andrew D’Souza, is a firm dedicated to eschewing traditional funding routes for up and coming startups by giving them cash to buy advertising in exchange for a revenue share. This way, they can skip the thought of trading in equity for traditional Series-round funding. Since raising that large round last month, over 1,000 companies have contacted Clearbanc looking to raise up to $1 billion. With that kind of interest and growth, Romanow and D’Souza knew they had to expand their own search for financing.
“In 2018, Clearbanc has funded over $100 million into 500 different companies. Our portfolio companies are putting that capital to work and growing at over 100 per cent year over year on average,” D’Souza, who is CLearbanc’s CEO, told TechCrunch. “We have been largely focused on e-commerce companies and subscription e-commerce, but have started doing some deals with enterprise companies. In 2019 we plan to expand internationally beyond the U.S. and Canada, introduce new verticals, and launch new financial products to help entrepreneurs.”
The model for Clearbanc is relatively simple. They look at how a company’s Facebook ads and Stripe sales metrics are doing, then give them a loan according to those figures. That number can vary between $5,000 and $10 million. That money goes right back into extending the company’s reach, and then Clearbanc and the original company split the money generated from new sales until the loan is paid back—plus six per cent.
These two recent rounds are acting as funds for Clearbanc to draw from when they find new companies and clients to load to. In that sense, they resemble traditional VCs who are raising nine-figure funds on their own to then invest back into companies they deem fit.
Clearbanc is also taking on two new board members with this latest raise: Groupon co-founder Rajen Ruparell and Third Point partner Keri Findley. There is a goal for the company to continue raising LP capital in 2019, with a goal of over $250 million.