Clearco: valuation, funding & revenue

Revenue

Funding history

Investors

Overview

Clearco, originally called Clearbanc, provides funding to e-commerce and online businesses in exchange for a share of their future revenue. It's one of the best-known names in revenue-based financing. A typical use case is a direct-to-consumer brand that needs cash to buy inventory or advertising and repays it as sales come in, without giving up equity.

Michele Romanow and Andrew D'Souza founded the company in Toronto in 2015. Romanow became widely known in Canada as a panellist on the TV show Dragons' Den.

The rise

Clearco grew very quickly during the e-commerce boom of 2020 and 2021, when online sales surged and founders wanted alternatives to selling equity. It raised large venture rounds and lending facilities, and reached a valuation reported at more than US$2 billion in 2021. That made it one of Canada's most visible fintech unicorns.

The recapitalization

From 2022, conditions turned sharply. E-commerce growth slowed after the pandemic, interest rates rose, which made Clearco's own borrowing more expensive, and venture and debt funding became much harder to get. The collapse of Silicon Valley Bank in March 2023 hit Clearco directly, because SVB's Canadian branch held a term loan to the company. BetaKit reported multiple layoff rounds, exits from overseas markets and a change of CEO.

In 2023, Clearco went through a complex recapitalization. The Globe and Mail reported that the plan would wipe out most of its valuation, targeting a new equity raise at about US$200 million including the new cash. Investors who didn't take part would see their stakes shrink sharply. In the end:

• Inovia Capital, Founders Circle Capital and SVB Capital bought back Clearco's US$60 million term loan from SVB's liquidated Canadian branch.
• Clearco closed a US$60 million Series D led by Inovia and Founders Circle.
• Pollen Street Capital provided a new asset-backed facility with up to US$100 million of capacity.

BetaKit later reported a further US$100 million asset-backed facility from Macquarie Group, as the company worked towards break-even.

Revenue: what's public

Clearco hasn't published audited revenue. Its income comes from fees on the funding it provides, so revenue rises and falls with the volume of capital deployed and the cost of its own borrowing. Third-party estimates of its 2021 revenue exist but aren't company figures, so we don't repeat them.

Lessons from Clearco

• Lenders need cheap capital. When interest rates rise, a lending business's margins get squeezed from both sides.
• Recapitalizations reset ownership. Investors who put in new money in a recap often end up owning most of the company, while others are heavily diluted. See our guide to liquidation preferences for why the terms matter so much.
• Your bank is a counterparty risk. SVB's failure showed that where a startup banks and borrows can become a crisis in itself.

What this means if you're…

An e-commerce founder: compare revenue-based financing offers on total cost and repayment terms, and check the provider's own funding stability.

Selling to Clearco: a company rebuilding towards profitability buys carefully, with a focus on risk management, underwriting data and efficiency.

Sources

Every figure on this page comes from the public sources below. Where sources disagreed, we used the company's own announcement or a primary news report. Private-company data changes; check the date beside each figure.

1. The Globe and Mail
2. BetaKit