DealmakingFintechM&A / Funding

Silicon Valley Bank and Clearbanc launch new capital program

The program is aimed at “pre-venture” funded SaaS and e-commerce startups, including fintech companies

E-commerce investor and funding platform Clearbanc is partnering up with Silicon Valley Bank (SVB) to launch a new capital program for “pre-venture” funded startups.

Specifically, Clearbanc plans to deploy more than $50 million in “non-dilutive capital” to the bank’s U.S.-based startup banking software and e-commerce clients to help expand their businesses, according to a news release.

Kevin Conway, vice president of partnerships at Silicon Valley Bank said in an email to FinLedger that Clearbanc’s non-dilutive capital offering helps startup founders increase their valuation and decrease overall dilution.

“When companies do decide to raise, SVB’s debt can augment the equity to extend a company’s runway while also reducing the company’s overall dilution,” Conway said in the email.

So how does Clearbanc offer non-dilutive capital exactly? It signs revenue-share agreements with companies after evaluating them with “data-driven” underwriting using machine learning technology.

The partnership offers eligible companies access to Clearbanc’s revenue-based advances which can be used for general growth, advertising spend and its inventory financing product. Companies can also get discounted fees and a valuation consultation from Clearbanc, while also having access to SVB Edge – which includes a checking account, business debit card, online banking, among other offerings.

The offering is for all qualifying early-stage, pre-venture funded companies, including fintech companies, according to Silicon Valley Bank.

Clearbanc’s algorithm allows it to give personalized funding offers in as little as 20 minutes, the Canadian company claims. Clearbanc provides funding between $10,000 to $10 million and offers can be made within 48 hours after application, according to its website.

Conway said that “SVB specializes in providing venture debt.”

“Once a company secures venture backing, they become eligible for venture debt,” Conway said in the email.

Founded in 2015, Clearbanc has deployed over $1 billion to more than 3,300 e-commerce and software companies and has portfolio companies in all 50 US states. It says it helps companies by providing a complimentary valuation consultation, “priority VC matching” with its network of over 100 VCs and a reduced fee for its first capital advance if funded by the end of 2020.

SVB has provided financial services and expertise for more than 35 years and has funded over 30,000 startups, according to previous reporting. SVB has commercial, international and private banking services.

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