INSUBCONTINENT EXCLUSIVE:
Clearbanc, a Toronto-based company that funds startups through equity-free investments, has laid off 17 employees to help it navigate the
long-term economic impact of COVID-19, TechCrunch has learned.
The cuts impact about 8% of the staff, affecting roles ranging from office
managers to recruiters and sales
Co-founder Michele Romanow says the company will use its connections to assist those affected by the layoffs to search for other work, and
offer extended benefits through the end of the financial quarter.
Clearbanc has been noisy in its journey toward being a venture capital
Just last week, Clearbanc announced a new financing product to help startups avoid cutting staff and stay operationally afloat: Clearbanc
And last year, it pushed out its &20-minute term sheet& to sell equity-free capital with a promise of founder friendliness
The model has seen the startup disburse $1 billion to nearly 2,200 companies so far, per its accounting.
In July 2019, the fintech company
raised a $250 million fund and $50 million in equity to broaden its investment goals
The co-founders say Clearbanc is continuing to see an increased demand for its capital
It hired more than 140 people last year alone.
Clearbanc is in a somewhat unique position during this downturn, as it largely funds
e-commerce businesses that have seen an uptick in usage as brick-and-mortar stores becomes less of an option due to social
distancing.
However, last week, co-founder Andrew D&Souza pointed to unpredictable market conditions: &There a lot of volatility and a lot
of uncertainty,& he said.
&We&re certainly going to be more conservative than we would have been six months ago
It probably looks like us writing smaller checks, more frequently,& he told TechCrunch last week.
Today layoffs, according to the company,
don&t directly impact Clearbanc ability to cut checks
Instead, the Clearbanc cuts signal that layoffs aren&t reserved for the time when the dry powder runs out
As the pandemic draws out, we&re learning that sometimes it a bit more preemptive than that.
A storm of layoffs have impacted a wide range
of startups and industries across the world
While travel and hospitality companies have felt the blunt of the pandemic economic impact, broader cuts show that sales and recruiting
teams from other industries are also vulnerable
Layoffs have been so ubiquitous that platforms have risen to help those laid off find their next gig
And in a time where uncertainty rules week to week, any effort to create meeting grounds for those with this tough shared experience is much
