Clearco (formerly Clearbanc) is a growth capital lender that is headquartered in Canada. Clearco offers revenue-based advances to startups, mainly in the e-commerce, SaaS and mobile apps sectors. Originally founded as Clearbanc, the company has raised over $681 million since its establishment seven years ago (Source - July 2022).
Clearco has financed over 7,000 companies since beginning operations. One recent financing was on Jan 1, 2022, when they invested in Newchip. Series B - Newchip investment was valued at $100M (Source - July 2022).
The performance finance products and services offered by Clearco are specifically designed for founders at all stages of their organizational development.
About Clearco
Clearco was founded by Andrew D’Souza and Michele Romanow in 2015 as Clearbanc. The company offers revenue-based financing for SaaS, mobile app, and e-commerce businesses. It has more flexible financing repayment options, lower borrowing costs, and allows borrowers to keep corporate rights to their firm (Source - July 2022).
Clearco specializes in Non-Dilutive Funding agreements with startups and online businesses (Source - July 2022).
Clearco has raised a total of $310M over four funds since its establishment. Thirty-one investors have funded the company. Intuit and SoftBank Vision Fund are the most recent investors (Source - July 2022).
Eligibility and Products Offered
One of the products Clearco offers is Clear Capital: marketing and inventory financing for e-commerce founders. The loans range in size from $10,000 to $20,000,000. The loan's repayment period is four months from the date of prepayment (Source - July 2022). The minimum criteria for a company to be eligible for the loan are to have over six months of revenue greater than $10k/month and be a corporation or limited liability company (Source - July 2022).
Clearco has a transparent fee policy. There is no compounding interest, so companies know how much they are paying up front before accepting an offer. (Source - July 2022). The standard interest rate ranges from 8% to 14%, depending on how the funds are spent, and is fixed meaning that there is no potential for growing costs (Source - July 2022).
Clearco also offers a free product that helps founders track metrics such as revenue growth and ad campaign performance to understand the position of their business. This service is known as insights (Source - July 2022).
How to Apply
To apply for funding from Clearco, individuals should submit an application on Clearco’s website. When applying, individuals must connect their sales and marketing accounts (Source - July 2022). This will be used to determine if they meet funding eligibility requirements. Depending on the application, funding can be as quick as 24 hours (Source - July 2022).
Capchase vs. Clearco
In addition to financing using venture debt from Clearco, founders and startups can work with Capchase. When compared to Clearco, Capchase’s funding model is designed to remove excess fees that can save clients up to 50% when compared to traditional venture debt providers (Source – June 2022).
It can be helpful to see the differences between Capchase and Clearco side-by-side. This is especially true for key areas like speed to funding, flexibility, structure & fees, and value add.
Speed
Capchase
24 hours to underwrite (led by a tech-driven & highly responsive underwriting system)
Clearco
Some applications can be approved in as little as 24 hours
Flexibility
Capchase
Highly Flexible: No traditional financial covenants on amounts financed
Clearco
Fairly flexible: No minimum net worth, working capital, current ratio, quick asset ratio, liquidity ratio, or debt-to-equity ratio is required to apply
Structure & Fees
Capchase
Transparent & Simple: No prepayment fees, closing fees, warrants, or hidden fees
Clearco
May include terms around prepayment, expensive closing process, warrants, admin fees
Value Add
Capchase
A prescriptive funding plan
Clearco
Discrete funding events
