Venture Capital Disruptor Clearbanc Raises $50M

Clearbanc, a company that provides a funding alternative to traditional venture capital outfits, has raised another $50 million in an equity investment, according to a report.

The Canadian company, which is based in Toronto, has raised $300 million so far. The latest funding round was led by Highland Capital with additional investments from Arcadia, iNovia and Emergence Capital. The other $250 million came from third-fund limited partners.

The company did not disclose its current valuation, but said that it wasn’t “forced to raise” any money, so the funds were “raised on terms that [they] liked.”

Clearbanc provides an alternative to venture capital funding by offering non-dilutive revenue-share contracts. It uses machine learning and data to make rapid decisions about possible investments and aims to back 2,000 companies by next year.

The company’s latest campaign is called the “20-Min Term Sheet,” in which Clearbanc invests somewhere between $10,000 and $10 million for eCommerce companies that have positive unit economics.

Clearbanc charges 6 percent on its capital and will collect some of a company’s revenue until the investment is paid back. It has invested in 791 online companies this year, which include Le Tote, UNTUCKit, Leesa Sleep and Public Goods. Clearbanc said its investments bring in around $121 million in revenue every month.

“The 20-minute term sheet was our take on showing the market how fast we could get startups access to capital,” said Clearbanc Co-founder and President Michele Romanow, adding that the company’s approach saves a lot of time when stacked up against a traditional VC experience.

“[Founders] don’t need to go and pitch their life story,” noted Clearbanc Co-founder and CEO Andrew D’Souza. “They don’t need to spend hours and hours on due diligence, and they don’t need to get on a flight and meet VCs in person – we’ve automated all of that.”

D’Souza added that he has grand ambitions for Clearbanc. “I have no doubt we will raise billions and billions for funds in the coming years, and I think we can be bigger than SoftBank,” he said. “If we aren’t aiming to do that, then we aren’t aiming to solve the problems that exist for entrepreneurs globally.”