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January 25th, 2023
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Clearco Hires Advisor to Evaluate Strategic Options and Exits Foreign Markets
News Achieve (As reported in the Globe and Mail) | Aug 31, 2022
The Toronto-based company, officially CFT Clear Finance Technology Corp., has also hired Financial Technology Partners, a leading US fintech investment bank led by transactions specialist Steve McLaughlin, to explore strategic options, including a possible sale of the company or new funding. Romanov, CEO of Clearco and television star dragon’s lair.
See: Real Estate Fintechs Feel the Heat as Macro Trends Unfold
Michelle Romanov, CEO Clearco:
The company is not for sale, but it is always prudent to consider strategic options in this environment. We were on a very fast international growth trajectory and hired ahead of global forecasts. Then the EU economy changed much faster than we thought. The current macro environment, the slowdown in e-commerce growth, means we are facing some pretty big headwinds that didn’t exist six months ago.
- This year, the fintech industry and broader tech sector globally saw a wave of layoffs in response to deteriorating economic conditions, especially among money-losing start-ups that were heavily dependent on external funding to pursue a “grow at any cost” strategy.
- At the end of July, Clearco laid off 125 of its 500 employees. Ms Romanov admitted at the time that the company was hiring too fast, anticipating growth that never materialized.
- On Tuesday, Clearco said it was partnering with London-based Outfund to take over its international business just months after expanding to Europe. Clearco will reduce its operations to focus on the US and Canada (80% of its business)
See: Canada’s Open Banking Journey: Interview with Simon Redfern, Founder of The Open Bank Project & CEO of TESOBE
- Clearco’s business model is also being questioned by the prospect of more defaults by sellers it finances and rising costs of capital as central banks raise interest rates. The company temporarily stopped offering new cash advances to sellers for a week in July to tighten underwriting practices and raise fees for the second time in two months.
- Also many top executives, including the chief financial officer, chief strategy officer, and vice president of operations and human resources. Ms. Romanov also replaced her former romantic partner and co-founder Andrew D’Souza as CEO this year, although Mr. D’Souza remains executive chairman.
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