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Illustration: Rebecca Zisser/Axios

Clearbanc, which lends money primarily to e-commerce startups for a flat fee, has raised a $50 million Series B round led by Highland Capital, and closed a new $250 million to finance companies.

Why it matters: Venture capital financing is not the right fit for every business, and it's an expensive way to finance recurring expenses like online ads.

  • While the fund is structured similarly to a venture capital fund (with limited and general partners), Clearbanc's funds only last 2 years instead of the common 10-year lifespan.
  • It's also much more similar to a fixed-income fund given its underlying model, says Clearbanc co-founder Andrew D'Souza.
  • "The other nice thing about being in the fixed-income category is that we don’t have the same incentives to grow," says co-founder Michele Romanow. "We’re not picking lottery tickets... We need all of them to grow, but we’re also not putting undue stress on the companies.”
  • Still, if a company fails, Clearbanc has to swallow the loss, says Romanow, adding that it's already happened to a number of businesses Clearbanc has underwritten.

By the numbers:

  • Most of Clearbanc's portfolio companies get more funds every one to three months.
  • More than 90% of companies have taken capital from Clearbanc more than once.
  • About 20% of companies have raised venture capital.
  • Companies can choose to repay back the capital via 1% to 20% of daily revenue — most choose 5% (Clearbanc charges a flat 6% fee).
  • On average, Clearbanc's portfolio companies generate $121 million in monthly aggregate revenue.

What's next: Clearbanc started by financing small-but-growing e-commerce companies, and says its new and larger fund will help it expand in multiple ways.

  • Internationally: Currently Clearbanc finances companies in the U.S. and Canada, but it has begun to test the waters in other parts of the world.
  • Bigger companies: Clearbanc has already started to lend to bigger businesses, like the mattress companies Leesa and Nectar and the fashion subscription box Le Tote.
  • New verticals: Next, it will focus on mobile apps with recurring revenue (a category that New York-based Braavo has been financing for a few years).

Go deeper

Updated 3 hours ago - Politics & Policy

Coronavirus dashboard

Illustration: Eniola Odetunde/Axios

  1. Health: Most vulnerable Americans aren't getting enough vaccine information — Fauci says Trump administration's lack of facts on COVID "very likely" cost lives.
  2. Politics: Biden unveils "wartime" COVID strategyBiden's COVID-19 bubble.
  3. Vaccine: Florida requiring proof of residency to get vaccine — CDC extends interval between vaccine doses for exceptional cases.
  4. World: Hong Kong to put tens of thousands on lockdown as cases surge.
  5. Sports: 2021 Tokyo Olympics hang in the balance.
  6. 🎧 Podcast: Carbon Health's CEO on unsticking the vaccine bottleneck.

Trump impeachment trial to start week of Feb. 8, Schumer says

Senate Majority Leader Chuck Schumer. Photo: The Washington Post via Getty

The Senate will begin former President Trump's impeachment trial the week of Feb. 8, Majority Leader Chuck Schumer announced Friday on the Senate floor.

The state of play: Schumer announced the schedule after reaching an agreement with Republicans. The House will transmit the article of impeachment against the former president late Monday.

4 hours ago - Health

CDC extends interval between COVID vaccine doses for exceptional cases

Photo: Joseph Prezioso/AFP via Getty

Patients can space out the two doses of the coronavirus vaccine by up to six weeks if it’s "not feasible" to follow the shorter recommended window, according to updated guidance from the Centers for Disease and Control and Prevention.

Driving the news: With the prospect of vaccine shortages and a low likelihood that supply will expand before April, the latest changes could provide a path to vaccinate more Americans — a top priority for President Biden.