A SoftBank Group Corp. fund is leading a US$215 million investment in Clear Finance Technology Corp., a Canadian growth capital startup that provides money to small online businesses.

Clear Finance, which operates under the name Clearco, provides funding to technology entrepreneurs in exchange for revenue-sharing agreements. It pitches itself as an alternative to venture capital for owners who don’t want to give up equity.

In April, the Toronto-based company was valued at nearly US$2 billion after a Series C capital raise. Tokyo-based SoftBank is leading this latest round through its Vision Fund 2. Intuit Inc., Bow Capital and Park West also participated, according to a statement Thursday.

Entrepreneurs apply for growth capital on Clearco’s platform without having to network or formally pitch. Investment decisions are based on a data-driven evaluation of performance metrics, which results in a greater diversity of founders backed, the company says.

In 2020, 13 per cent of Clearco’s funding went to companies led by Black and Latino founders, compared to 2.6 per cent across the venture capital industry, according to a company statement. The startup says it also backed eight times more female-founded businesses than the industry average for venture capital firms.

“When we make an investment decision, we don’t see a picture of the founders. We don’t know what you look like. It’s really based on what your unit economics look like and audiences sizes,” President Michele Romanow said in an interview. “Taking a totally different approach has allowed us to see something totally different.”

Asia Expansion

Clearco has invested US$2.4 billion in 5,500 businesses, with individual investments of as much as US$10 million, Chief Executive Officer Andrew D’Souza said. It plans to use the new money to pay for expansion abroad and product development.

“We’re a company that was built by founders for founders, and we’ve all faced the same issues we are working to not only solve but replace with better products and opportunities,” D’Souza said in a news release.

Having launched in the U.K. last October and the Netherlands in May, the company is planning to expand into Asia by the end of 2021. Clearco has hired two new executives to lead product and technology development in the last two months, including Katrina Shackelford, a former director of product at Amazon.com Inc.

Clearco is part of a growing list of Canadian tech companies that have achieved unicorn status this year. In the first quarter, Canadian companies raised US$2.5 billion in venture capital funding, according to KPMG.

Although there are no immediate plans for an initial public offering, taking the company public is “probably on the horizon,” Romanow said in a separate interview on BNN Bloomberg Television.

“At some point, we will likely look to the public markets.”