Dragons’ Den star’s startup secures another US$50-million in financing

Globe and Mail | Sean Silcoff | Dec 18, 2018

clearbanc andrew and michelle - Dragons' Den star’s startup secures another US$50-million in financingDragons' Den star Michele Romanow and her partner Andrew D’Souza have secured another US$50-million to grow their latest startup, Clearbanc, just weeks after announcing they had raised US$70-million to bankroll the financing provider for e-commerce firms.

Now, they are looking to secure hundreds of millions of dollars more to meet a surge in demand from online sellers looking for cheap alternatives to finance their growth.

“We see this as a pretty exciting next step,” said Ms. Romanow, president and co-founder of Clear Finance Technology Corp., which operates as Clearbanc. “I don’t think we expected this to come this quickly.”

Clearbanc fronts e-commerce entrepreneurs with money to pay for their online advertising in exchange for a small percentage of revenues that spending generates, until they repay the amount in full, plus a 6-per-cent premium. Customers do not have to provide personal guarantees, give up equity or submit to credit checks. Instead, they provide Clearbanc with access to business data from their online payment processors, their online advertising accounts and bank accounts.

Clearbanc’s software then crunches the data and assesses their unit economics in minutes, spitting out an automated financing offer based on the customer’s ability to repay. There are no fixed payment schedules, maturity dates, late penalties or collateral, and companies typically repay their obligations within six months. They also don’t have to give up a chunk of equity in their company to venture capital firms to fund their marketing spend. “I really believe if they do this right it will disrupt traditional venture capital,” said Rajen Ruparell, founder of online mattress company Endy Canada Inc. and a new member of Clearbanc’s board of directors.

On Nov. 12 the couple revealed their company had raised US$70-million from 12 U.S. and Canadian venture capital firms and had done 500 deals with e-commerce firms to date, providing US$100-million in total funding – partially drawn from the money it had raised. After that news broke, Clearbanc was inundated with applications from 1,000 more companies seeking US$1-billion in total capital. “We used up the initial allocation much faster than we expected and realized we needed additional capital,” said Mr. D’Souza, co-founder and chief executive.

See:  Canadian tech leaders form coalition advocating for new blockchain regulation

The couple told their investors they needed more capital, and fast. A principal at one of Clearbanc’s investors, New-York venture capital firm CoVenture, introduced them to Jason Finger, chairman of Upper90, a private equity firm and one of CoVenture’s backers. That was on Nov. 16. Seventeen days later, Upper90 closed on a deal to provide Clearbanc with the US$50-million.

Mr. Finger said New York-based Upper90, which is backed by individuals who have built businesses, was set up to provide “alternative capital” to tech firms that have struggled to raise money because conventional financiers “misunderstood” their opportunity.

“When we met with [Clearbanc] we felt the stars were aligned and we were ready to deploy quickly ... we saw that the revenue growth [Clearbanc’s financing business] was able to drive was extremely compelling. It made us confident we would be helping businesses in a positive way."

Mr. D’Souza said Upper90’s money will be used to create a US$50-million, two-year fund that will be separate from Clearbanc’s capital structure but which it will draw from to finance its e-commerce customers. Clearbanc will manage the fund, taking an upfront management fee plus a share of the returns the fund earns from financing Clearbanc’s customers. Mr. D’Souza says he expects to be able to deploy the money four times over the fund’s two-year life, meaning it will be used to provide about US$200-million worth of financing in total. He said another new Clearbanc director, Keri Findley, a former partner with Third Point Hedge Fund, helped develop the fund structure.

Continue to the full article --> here


NCFA Jan 2018 resize - Dragons' Den star’s startup secures another US$50-million in financing The National Crowdfunding & Fintech Association (NCFA Canada) is a financial innovation ecosystem that provides education, market intelligence, industry stewardship, networking and funding opportunities and services to thousands of community members and works closely with industry, government, partners and affiliates to create a vibrant and innovative fintech and funding industry in Canada. Decentralized and distributed, NCFA is engaged with global stakeholders and helps incubate projects and investment in fintech, alternative finance, crowdfunding, peer-to-peer finance, payments, digital assets and tokens, blockchain, cryptocurrency, regtech, and insurtech sectors. Join Canada's Fintech & Funding Community today FREE! Or become a contributing member and get perks. For more information, please visit: www.ncfacanada.org

Latest news - Dragons' Den star’s startup secures another US$50-million in financingFF Logo 400 v3 - Dragons' Den star’s startup secures another US$50-million in financingcommunity social impact - Dragons' Den star’s startup secures another US$50-million in financing

CONGRATULATIONS TO THE 2020 FINTECH DRAFT PITCHING AND DEMO COMPANY WINNERS!



FFCON20 Pitching and Demo Winners - Dragons' Den star’s startup secures another US$50-million in financing



NCFA COVID 19 letter to government to support Fintechs and SMEs - Dragons' Den star’s startup secures another US$50-million in financing

NCFA Newsletter subscribe600 - Dragons' Den star’s startup secures another US$50-million in financing

HSE | Sarah H. Brennan | Jan 9, 2021 2020 US Summary If we put the last quarter of 2020 aside, this year could be marked by the sheer number of SEC enforcement actions and settlements in the crypto space, with more rumored to be in the works. However, the U.S. ended 2020 with a bang in the form of a flurry of proposed crypto regulations in Q4 with varying degrees of controversiality. Notably, the proposed STABLE Act and Mnuchin's midnight rulemaking on self-custody have caused a bit of an uproar, which we touch on in more depth below. See:  Vitalik’s 2020 Year End Thoughts from Singapore Absent these recent rulemakings, there has been an unevenness in the Trump administration’s approach to the space and the last four years at the federal level haven’t been marked with any significant level of regulatory coordination or cohesive policy at the federal level. However, to pick upon some themes that we will talk about in this year-end review, regulators have vacillated between: (i) a focus on enforcement vs. prescriptive guidance, (ii) a tech specific vs. tech agnostic approach, (iii) aggressive views of jurisdictional reach vs. deference, and (iv) state, federal, and global coordination ...
Read More
crypto US regulation 2020 in review - Dragons' Den star’s startup secures another US$50-million in financing
Altfi.com | Aisling Finn | Jan 11, 2021 Fintechs flourished on Seedrs, maintaining the title of the most invested-in sector, with £78m invested in fintechs through the platform. Crowdfunding platform Seedrs saw investments through its platform top £293m in 2020, hitting a milestone of £1bn invested to date on Christmas Day. Fintech remained the most invested-in sector, scooping £78m collectively, with other areas seeing huge increases in investment, for instance, healthcare firms saw a 292 per cent jump in investment in 2020. Seedrs says over 70 campaigns raised over £1m on the platform, with big fintech names such as money management app Snoop, which raised £10mhere have been nearly 14,000 investor exits on its secondary market to the tune of £5m, Seedrs says. Jeff Lynn, executive chairman and co-founder of Seedrs, said: “Given the huge challenges that 2020 posed for all businesses, it is a source of great pride for the Seedrs team that have come to the end of the year having delivered meaningful growth across all key metrics.” See:  Regulation Crowdfunding Cap in the US moves from $1.07M to $5M on March 15, 2021 NCFA Response to the Modernizing Ontario’s Capital Markets Consultation Taskforce The record figures come ...
Read More
seedrs jeff lynn - Dragons' Den star’s startup secures another US$50-million in financing
The New York Times | Steve Lohr | Jan 10, 2021 Tim Berners-Lee wants to put people in control of their personal data. He has technology and a start-up pursuing that goal. Can he succeed? Three decades ago, Tim Berners-Lee devised simple yet powerful standards for locating, linking and presenting multimedia documents online. He set them free into the world, unleashing the World Wide Web. Others became internet billionaires, while Mr. Berners-Lee became the steward of the technical norms intended to help the web flourish as an egalitarian tool of connection and information sharing. See:  PwC Report: Canadian Digital Trust Insights 2021: Cybersecurity comes of age But now, Mr. Berners-Lee, 65, believes the online world has gone astray. Too much power and too much personal data, he says, reside with the tech giants like Google and Facebook — “silos” is the generic term he favors, instead of referring to the companies by name. Fueled by vast troves of data, he says, they have become surveillance platforms and gatekeepers of innovation. Regulators have voiced similar complaints. The big tech companies are facing tougher privacy rules in Europe and some American states, led by California. Google and Facebook have been hit with ...
Read More
Tim berners lee - Dragons' Den star’s startup secures another US$50-million in financing
Hardbacon | Julien Brault | Jan 15, 2021 In my time as a business reporter, I was at the forefront during the decline of the country's 2000s tech giant, BlackBerry. BlackBerry launched its mobile app store in 2009, a year after Apple launched the App Store. Everyone knows the rest of the story. See:  NCFA OpEd: Canada’s Open Banking Consultations: Let’s Get it Done! While BlackBerry executives praised themselves for having better sound quality and a more efficient keyboard, what people wanted when they bought a smartphone were apps. Today, the Canadian banks are making the same mistake by refusing to put control of financial data back into the hands of their users, as the European banks are already doing. In fact, since September 14, 2019, European open banking regulations (PSD2) force banks to allow their customers to share their data with third parties according to a standardized protocol. In other words, their customers can choose to share their bank information with an online loan app or even with a budgeting app. In Canada, the federal government created the Advisory Committee on Open Banking in 2018, which delivered its first report in 2020, which was very favorable to open banking ...
Read More
open banking vault with data - Dragons' Den star’s startup secures another US$50-million in financing
Crowdfund Capital Advisors | Sherwood Neiss | Jan 14, 2021 Today the Securities and Exchange Commission entered into the Federal Register the amendments to Regulation Crowdfunding. Specifically, facilitating capital formation and expanding investment opportunities by improving access to capital in private markets. These include: Raising the offering limit in Regulation Crowdfunding from $1.07 million to $5 million; Amending the investment limits for investors in Regulation Crowdfunding offerings by: removing investment limits for accredited investors; and using the greater of their annual income or net worth when calculating the investment limits for non-accredited investors; Extending for 18 months the existing temporary relief providing an exemption from certain Regulation Crowdfunding financial statement review requirements for issuers offering $250,000 or less of securities in reliance on the exemption within a 12-month period; Permitting Regulation Crowdfunding issuers to “test-the-waters” prior to filing an offering document with the Commission in a manner similar to current Regulation A and, Establishing rules that permit the use of Special Purpose Vehicles (SPV) that function as a conduit for investors to facilitate investing in Regulation Crowdfunding issuers. See:  NCFA Response to CSA on NI 45-110 Harmonized Securities Crowdfunding Rules View the Federal Register and Final Rule --> here The ...
Read More
Federal register RegCF increase caps to 5M - Dragons' Den star’s startup secures another US$50-million in financing
CD Howe | Robert Asselin | Jan 13, 2021 You are taking on your new role at a challenging time. Coming out of the COVID-19 pandemic, providing a brighter economic future for all Canadians will require a long-term plan and strategic investments in our productive capacity. Greater productivity drives economic growth, business investment and employment, which in turn will generate higher living standards, more sustainable social programs, and greater social mobility. To increase Canada’s productive capacity, we need to leverage the country’s human, physical and intellectual capital. Here are four ways to achieve that: 1. Re-skilling our workforce for the digital economy Canada’s most important asset is its human capital. The COVID-19 emergency has accelerated a transition that was already underway in Canada’s labour market. Rapid technological change, an uncertain and volatile environment for exports, the rise of the gig economy, and ongoing demographic shifts have combined to create a new reality for Canadian employers. See:  Magnetic North: How Canada Holds its Own in the Global Race for Innovation Talent From Global Leader to Follower, is Canada losing its FinTech edge? While employers in some fields struggle to find skilled workers, close to a million Canadians are currently unemployed and many others are at risk of being displaced over the next few years as a result of ...
Read More
competition innovation transformation - Dragons' Den star’s startup secures another US$50-million in financing
NCFA | Samuel He | Jan 13, 2021 As a Gen Z, technology has played a big role in my everyday life ever since I was young and now as a remote intern at NCFA, I’m excited to share some research and insights on Big Tech and Fintech credit markets. Big Tech and its expanding dominance Lending institutions such as banks and credit unions have traditionally been the chief sources of finance in most economies in the world, however large technology firms are uniquely positioned to capitalize on a technology-focused alternative to financial services. Their advanced AI and machine learning capabilities allow these companies to utilize the swaths of data that their user base generates to tailor prices, determine creditworthiness, and screen loans. Amazon’s e-commerce sales for example, reached a staggering $416.48 billion in 2020.   As online channels expand due to general trends and the global pandemic, they pose an   existential thread to traditional brick and mortar models. UBS analysts estimate that 75,000 brick-and-mortar stores could be forced into closure by 2026. See:  Walmart to launch fintech startup with partner Ribbit Capital Companies like Walmart have seen their supply-side economies of scale diminished by competing and efficient online marketplaces that ...
Read More
Rise of Big tech and fintech credit - Dragons' Den star’s startup secures another US$50-million in financing
The Guardian | Kalyeena Makortoff | Jan 12, 2021 More than 70 cross-party MPs are calling for regulation of buy now, pay later firms such as Klarna and Clearpay, which they say could be “the next Wonga waiting to happen.” The group is planning to table an amendment to the financial services bill on Wednesday that would force the Treasury to introduce regulations within three months of the bill being passed. MPs hope the accelerated timeline will prevent some consumers from falling into debt. Companies including Clearpay, Laybuy and industry leader Klarna have taken online shopping by storm, allowing customers to stagger payments for products such as clothes and furniture with no interest or fees – unless they fail to pay back on time. The model has proved popular among millennials and Gen Z shoppers and their use has grown during lockdown. Shoppers are using the schemes 35% more often than before the pandemic, according to Comparethemarket.com, while 27% said they were turning to the service because they could not afford the purchase outright. “Many people have [financially] overcommitted themselves using buy now, pay later companies, and we are facing mass redundancies, furloughing, and drops in income. So even if ...
Read More
buy now pay later - Dragons' Den star’s startup secures another US$50-million in financing
Bankingdive | Anna Hrushka | Jan 11, 2021 Summary: Walmart is creating a fintech startup in partnership with venture capital firm Ribbit Capital, the big-box retailer announced Monday. The new venture will "develop and offer modern, innovative and affordable financial solutions" to customers and employees, Walmart said. "For years, millions of customers have put their trust in Walmart to not only save them money when they shop with us but help them manage their financial needs," John Furner, president and CEO of Walmart U.S. said in a statement. The details of Walmart's new fintech startup are scarce. The Bentonville, Arkansas-based company did not disclose the name of the new entity, specific services or a launch date. The retailer said the strategic partnership "will bring together Walmart's retail knowledge and scale with Ribbit's fintech expertise to deliver tech-driven financial experiences tailored to Walmart's customers and associates." The startup will be majority-owned by Walmart and its board will include Furner, Walmart Executive Vice President and CFO Brett Biggs and Meyer Malka, managing partner of Palo Alto, California-based Ribbit Capital. See:  Amazon, Walmart, the Secret Battle for FinTech Supremacy: Part II Walmart said its plans to add independent industry experts to the fintech's board and ...
Read More
Walmart partners to launch stealth fintech - Dragons' Den star’s startup secures another US$50-million in financing
WiredGov | TechUK | Jan 11, 2021 Summary of day one at techUK's Digital Ethics Summit 2020. On Wednesday 9 December we kicked off techUK’s fourth annual Digital Ethics Summit. The overarching theme for day one of the Summit was lessons to be learnt from 2020. Through a series of keynote speeches, breakout sessions and plenary panels, our speakers from across industry, government, academia and civil society, assessed the role and effectiveness of the digital ethics debate during the critical events that occurred this year. To kick start the day we were joined by the Minister of State for Media and Data, John Whittingdale. As part of his keynote speech the Minister set out Government’s ambition for the upcoming National Data Strategy and highlighted work that is already underway, starting with the publication of the Government Data Quality Framework. The Minister stressed that underpinning this strategy is public trust and highlighted the need to bring the public along in these important conversations. The Minister also recognised the importance of digital skills and highlighted government’s 13M investment in a bid to boost digital skills. The Minister finished by reaffirming the importance of collaboration between the public and private sector, as well as the ...
Read More
Digital ethics summit 2020 - Dragons' Den star’s startup secures another US$50-million in financing