Fintech startup Clearco, which provides capital to startups, has raised $215 million in an equity funding round led by SoftBank Group Corp`s Vision Fund 2 as it accelerates its international expansion.
Founded in 2015, the company is based in New York, London and Toronto by Canadian entrepreneurs and investors Andrew D`Souza and Michele Romanow. Romanow, who is on Canadian reality TV show “Dragon`s Den” where entrepreneurs pitch ideas for an investment, said she heard proposals again and again for funding for marketing and inventory.
“I remember talking to Andrew and I was like, why are founders using the most expensive capital in the world to do something that really has a fixed return?” said Romanow.
Both of them came up with the idea of funding startups and getting repaid with 1% to 20% of the revenue until they recuperate the entire investment and in addition to that there is another 6% to 12% depending on where the money is spent.
So far they have provided $2.4 billion to 5,500 founders, said D`Souza.
E-commerce, mobile app and enterprise software companies with a turnover of more than $10,000 in monthly revenue can apply for up to $10 million by just getting all their financial accounts into Clearco`s system which basically analyses the data and suggests where to spend the money for the greatest benefit.
Clearco further revealed that this model has caused eight times as many companies headed by female founders as traditional venture capital firms last year. Around 13% of Clearco`s funding went to companies headed by Black and Hispanic founders versus 2.6% for traditional venture capital firms.
The founders declined to talk about the latest valuation, but in April Clearco raised $100 million for a valuation of just under $2 billion.