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Illustration: Axios/Lazaro Gamio

Clearbanc, a company that provides non-dilutive funding to startups as an alternative to VC funding, will lend $1 billion in capital this year through a combination of the $120 million it disclosed last year, new outside funding, and recycling its own capital.

The bottom line: "Today, 40% of VC dollars in companies are spent on Google and Facebook ads," Michele Romanow, co-founder of Clearbanc and an investor, tells Axios. "Founders are using the most expensive capital for this."

  • Instead of buying equity in a startup, Clearbanc simply charges a 6% fee for a loan. The startup shares a percentage of its revenue with Clearbanc until it's paid back.
  • Clearbanc uses data like a company's Stripe transactions and Facebook ad conversions to vet potential investments. It mostly funds e-commerce startups with consistent revenue.
  • Investors in Clearbanc's funds include CoVenture, Upper90 and Social Capital (which debuted its own similar program in 2017 called "Capital-as-a-Service").

Go deeper: Venture capital may not be a one-size-fits-all system

Editor's note: The story has been corrected to note that Clearbanc will be able to lend startups $1 billion this year (not that it has raised $1 billion, as the company originally told Axios).

Go deeper

Tony Hsieh, longtime Zappos CEO, dies at 46

Tony Hsieh. Photo: FilmMagic/FilmMagic

Tony Hsieh, the longtime ex-chief executive of Zappos, died on Friday after being injured in a house fire, his lawyer told the Las Vegas Review-Journal. He was 46.

The big picture: Hsieh was known for his unique approach to management, and following the 2008 recession his ongoing investment and efforts to revitalize the downtown Las Vegas area.

Dan Primack, author of Pro Rata
5 hours ago - Economy & Business

The unicorn stampede is coming

Illustration: Annelise Capossela/Axios

Airbnb and DoorDash plan to go public in the next few weeks, capping off a very busy year for IPOs.

What's next: You ain't seen nothing yet.

19 hours ago - World

Maximum pressure campaign escalates with Fakhrizadeh killing

Photo: Fars News Agency via AP

The assassination of Mohsen Fakhrizadeh, the architect of Iran’s military nuclear program, is a new height in the maximum pressure campaign led by the Trump administration and the Netanyahu government against Iran.

Why it matters: It exceeds the capture of the Iranian nuclear archives by the Mossad, and the sabotage in the advanced centrifuge facility in Natanz.