The company behind the ‘20-minute term sheet’ has raised more than $900m to date.
Fintech start-up Clearco has raised $215m of new capital in a round of funding led by SoftBank Vision Fund 2.
The company, known until April as Clearbanc, was founded in 2015 by Michele Romanow, Andrew D’Souza, Ivan Gritsiniak, Charlie Feng and Tanay Delima. Clearco invests in and provides financial services to e-commerce businesses, and claims to be “the world’s largest e-commerce investor”. The company says it has invested $2.4bn in more than 5,500 individual businesses to date.
Clearco’s ‘20-minute term sheet’ model asks companies to connect their accounts and analytics to its system, whereupon it analyses their business and approves investments within 24 hours. Companies can receive between $10,000 and $10m, equity-free, in exchange for Clearco taking a percentage of their revenue until its investment is recuperated, with interest. It also provides financial advice and analytical services to clients.
“Softbank’s investment during a moment where we are accelerating at breakneck speed and leading a founder’s revolution is both humbling and exciting as we continue to work towards removing archaic barriers and offer an alternative and accessible solution for founders all around the world,” said Romanow, who serves as Clearco’s president.
“We’re a company that was built by founders for founders, and we’ve all faced the same issues we are working to not only solve but replace with better products and opportunities through an entire new category,” said D’Souza, the company’s CEO.
With this round of funding, Clearco has now raised more than $900m. It places particular emphasis on the equitability of its investment approval process. The company claims to fund female-founded businesses at eight times the rate of other venture capital firms, and that a third of its funding has gone to start-ups led by people of colour.
The company has had its challenges, however, having cut 8pc of its workforce in April 2020. SoftBank has also had troubles, with its investment in WeWork coming under scrutiny as the latter struggled both before and during the pandemic. This contributed to the Japanese investment giant posting a $6.4bn quarterly loss in 2019.
“Clearco is a market leader who has created an entire industry that is fiercely dedicated to democratising access to capital and a full suite of services that serve the founder journey,” commented 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.”