Michele Romanow's Clear Finance Technology Corp. said Wednesday it has raised US$50-million led by Boston’s Highland Capital Partners.star Michele Romanow that is aiming to transform how young e-commerce companies finance their growth has secured US$300-million in capital to fund its own expansion.
The first chunk is an investment in the Clearbanc business itself; the larger amount is a key input for the company’s business model. Clearbanc provides cash advances to e-commerce companies to spend primarily on marketing on Facebook, Google and other online channels. Clearbanc then receives a small percentage of the ensuing revenues generated by their customers until the advance is repaid, plus a 6-per-cent premium .
For young companies, it’s a cheaper option to fund their marketing, compared with other choices such as bank loans , running up their credit cards or selling stakes of their companies to early-stage investors. “The message and value proposition has really resonated in the market,” said Ms. Romanow, Clearbanc’s president, whose life partner, Andrew D’Souza, is chief executive.
“I think [Clearbanc’s business model is] smart,” said Erin Bury, CEO of Final Blueprint Inc., a Toronto-based online estate-planning startup operating as Willful that has secured $45,000 in funding from Clearbanc and paid most of it back. She called Clearbanc “one of the only sources of capital for early-stage digital-product companies,” adding it has allowed her company to delay its search for equity financing.
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