Clearbanc is a company that is planning to provide growth capital for online-enabled businesses based on business data rather than personal credit scores. At Techonomy, Clearbanc announced that it raised $70 million in funding from investors such as Emergence Capital, Social Capital, CoVenture, Founders Fund, 8VC, iNovia Capital, Real Ventures, Portag3, Precursor, WTI, Berggruen, and FJ Labs. In conjunction with the funding, Emergence Capital partner Santi Subotovsky is joining Clearbanc’s board of directors.
Clearbanc was founded in 2015 by serial entrepreneurs and angel investors Andrew D’Souza and Michele Romanow. Romanow is also a TV personality who joined CBC’s Dragons’ Den in Season 10. Dragons’ Den is similar to the show Shark Tank on ABC in the US.
“I saw hundreds of entrepreneurs on Dragons’ Den every year, who had great businesses but needed a better funding model,” said Romanow in a statement. “Whether an entrepreneur needs $10 thousand or $10 million, we started Clearbanc to serve them efficiently and scale in a manner other investors cannot.”
How does Clearbanc work? Clearbanc’s technology provides entrepreneurs with access to capital without personal guarantees, warrants, equity, or credit checks. And Clearbanc uses an online automated system to scan data from a business’ existing platform such as Stripe and Facebook to gauge their financial health and revenue trajectory.
Businesses that are qualified will receive ongoing capital in as little as one day as a capped revenue shared deal. The capital will have to be repaid as businesses make revenue with no set repayment date and no compounding interest, ownership, or control terms. Clearbanc is able to provide companies with $5,000 to $10 million or more in marketing capital.
“This is a landmark year for us. We’ve funded over $100M in marketing capital for over 500 ecommerce brands already in 2018,” added D’Souza. “Clearbanc not only puts the power back in the hands of entrepreneurs — rather than investors and banks — but also plans to fund millions of small businesses globally instead of the small handful that most investors typically fund in a year.”
Clearbanc’s average portfolio company is growing at more than 100% per year and the majority are using Clearbanc funding to finance high-growth digital marketing campaigns. And Clearbanc is known for being part of the first group of entrepreneurs participating in Y Combinator’s Fellowship program.
Clearbanc has invested more than $100 million in 500 companies in 2018 such as VINEBOX, according to TechCrunch. “After completing the Y Combinator accelerator program, I used to spend so much time talking to investors who didn’t understand my business model,” explained VINEBOX co-founder and CEO Matt Dukes. “Pitching was always a struggle, even though my business was growing rapidly. With Clearbanc, I accessed marketing capital easily and within a matter of days. This allowed me to double down on marketing, grow the business over 500 percent, and successfully raise a better venture capital round.”