Clearco, a provider of alternative finance for ecommerce businesses, is to create 125 jobs locally. It also intends to provide €100 million in financing for Irish companies.
The company, whose rivals include Irish tech unicorn Wayflyer, was founded in 2015 by tech entrepreneur and star of the Canadian edition of Dragons' Den Michele Romanow and Andrew D'Souza.
Backed by Japanese conglomerate Softbank, Clearco has provided more than $3.2 billion for more than 7,000 business globally to date, with Ms Romanow telling The Irish Times that the company has a target of ultimately supporting one million digital-first companies.
Valued at $2 billion, Clearco is an alternative option to venture capital, providing fast, affordable funding of up to $20 million for ecommerce companies without them having to give up any equity.
It uses artificial intelligence and data science to assess a company’s ability to repay loans based on revenue and ad spend. The “revenue-based financing” model, which Clearco helped pioneer, allows start-ups to invest in inventory and marketing and pay back as it earns. The company, formerly Clearbanc, makes 6 per cent in fees from advances when they are repaid.
It is a risky proposition for Clearco given it foots the bills if companies can’t repay advances. Ms Romanow said that, in the early days, defaults ran as high as 20 per cent but that this has narrowed to close to nothing given how successful its technology is in establishing who is unlikely to be able to pay back loans.
Clearco established operations locally last year and now employs 75 people. It has already provided financing for a number of Irish companies, including Gym and Coffee and Kindora.
It intends to increase the funding it provides for Irish companies while also using Dublin as a base to expand further across Europe. The new jobs being announced are to aid expansion and primarily cover sales and business development.
As well as providing non-dilutive capital without personal guarantees, Clearco also gives data insights to companies to help them grow further. It even assists founders to sell companies when they plan to exit, with more than 12 companies acquired to date.
Ms Romanow said that, in addition to being able to provide financing to companies that might not be able to access it easily, Clearco’s technology has proven exceptional at addressing other underserved communities. More than half of its global portfolio consists of businesses led by women. In addition, it is also accessible to companies operating outside the main metropolitan areas: 70 per cent of UK businesses that secure funding from Clearco are based outside London.
Clearco says it has considerable knowledge of the Irish market, and companies that operate here, including Wayflyer.
“They built a copycat of what we’re doing, which I think is incredibly flattering,” Ms Romanow said.
She said Clearco has received a warm welcome since establishing operations locally and is excited about the opportunities both here and in mainland Europe.
“We’re looking forward to helping more founders find success without having to give away equity cheaply,” she said.