Clearbanc: Behind The Deal With inovia capital

November 20, 2018 | By: Jon Jackson
Photo: (Left) Andrew D’Souza, Co-founder and CEO, Clearbanc and (Right) Michele Romanow, Co-founder and President, Clearbanc.

On Nov. 12, Toronto-based Clearbanc announced it had successfully raised USD $70M from a syndicate that included, inovia capital, Real Ventures, Portag3 Ventures, Emergence Capital Partners, 8VC, Social Capital, CoVenture, Founders Fund, Precursor, WTI, Berggruen, and FJ Labs.

Clearbanc provides online advertising to companies via platforms like Google and Facebook in exchange for a percentage of revenues. Clearbanc says this allows companies to focus on acquiring more customers and growing their business.

Following the latest raise, we caught up with CVCA member, inovia, to find out more about the deal and the factors driving the interest in Clearbanc.

Why did inovia choose to invest in Clearbanc and the management team?

We originally invested in Clearbanc because we saw in the leadership—both Michele Romanow and Andrew D’Souza—serial entrepreneurs who had a “people first” mindset. From their business model to their product roadmap to their mission, everything they do focuses on reducing friction for startups looking to scale. The challenges of scale are something we focus on a lot, and so seeing others solve that problem in a new way is really exciting to us. Michele and Andrew are the sort of founders that our other entrepreneurs would call their favourite entrepreneurs—and that is very much in line with our organization’s thinking about the two of them.

What will the invested dollars be used for?

Clearbanc will use the funds to enhance their technology stack and strengthen opportunities for customers through stronger partnerships with payment processors, marketing platforms, and other strategic allies.

Where did inovia about the Clearbanc?

General partner Karam Nijjar and Andrew both attended UWaterloo and have been in orbit for a number of years. We worked with Andrew when he was CRO of Top Hat, another Toronto-area investment, and saw in him a great leader that knew how to scale complex technology platforms. When he moved on and connected with Michele, we knew that their next venture would be both compelling and well executed.

What is your anticipation about this sector in the short term and long term?

In the short term, we see a lot of opportunity for Clearbanc to take a strong market position. As their platform is agnostic to payment processors and e-commerce platforms—working seamlessly with Stripe, PayPal, Authorize.net, Shopify, Amazon and others—we see that they can leapfrog ahead of the competition that only has access to siloed data. We also believe that online retail is still on a fast growth path, so all signs are “go” for them right now. Long term, they will need to stay on top of who is gaining ground in the attention game. Will Facebook and Google stay on top? For the foreseeable future, yes—but keeping on top of marketing platforms is an important piece of the long-term game. The same goes for the underlying commerce engines.

Is there anything particularly interesting Clearbanc that you’d like to emphasize?

Really, it’s just that the founders are a great fit for this company and this moment in time. They are seasoned leaders and operators working in a very complex space. What they’re doing is very new and has the potential to shift the dynamics in the e-commerce market. We believe in their ability to stay laser-focused on the customer, which in turn will translate into a great future for the company. This is a model that is working and can scale. These two are the right individuals to lead that charge because it is a singular obsession for them.

Tell us about the lead at inovia involved in this deal.

We have a number of people working on this deal, from both our Montreal and Toronto offices. General partner Karam Nijjar has a lot of experience in the next generation retail and marketing tech space, and Alex Barrett and Sarah Marion have been working deeply at investigating Fintech trends and opportunities. We’ve gone in with our eyes very wide open.

What are some of the ways the Clearbanc is making an impact in the community (environmental, social, governance)?

It’s come to light that when we use well-designed analytics tools to determine lending viability, we remove bias. Clearbanc has discovered that they have already exceeded standard lending rates to women 8x.


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