A $60 million Silicon Valley Bank loan to Clearco is being scooped up by the struggling Canadian e-commerce lender’s original venture backers, according to people with knowledge of the matter.
iNovia Capital and Founders Circle Capital, joined by the still operating venture capital arm of SVB, are buying the loan from Canada’s financial regulator, which has been seeking to wind up the failed bank’s Canadian operations since mid March, the people said. Clearco was SVB Canada’s largest debtor among more than 200 firms primarily in the technology, life sciences and clean technology industries.
A Clearco spokesperson declined to comment. Representatives for iNovia, Founders Circle, SVB Capital and PricewaterhouseCoopers, the liquidator of SVB Canada’s assets, didn’t respond to requests seeking comment.
Canada’s Globe and Mail first reported on the purchase.
Read more: SVB’s Biggest Debtor in Canada Is Romanow’s Tech Finance Firm
The Canadian loan the funds are buying is part of an $80 million debt package that SVB’s Canada branch originated for Toronto-based Clear Finance Technology Corp., which operates under the name Clearco, in February 2022. It includes a $40 million fully drawn senior secured revolving credit facility, and a $40 million term loan, half of which was syndicated to SVB Capital in the US.
The loan sale comes amid an ongoing equity raise, according to one of the people familiar, who asked not to be identified because they’re not authorized to speak publicly. The fintech — an alternative lender that offers cash advances to e-commerce and software startups — has been struggling amid a tech sector downturn, having done extensive staff cuts and exited markets outside North America.
As recently as 2021 it was valued at nearly $2 billion following a Series C capital raise. A SoftBank Group Corp. fund led a $215 million investment in the firm later that year.
Clearco was co-founded by Michele Romanow, who came up with the idea after appearing on “Dragons’ Den” — the Canadian television show that inspired “Shark Tank,” in which investors get pitched business ideas by contestants.
It’s seen a number of management changes over the past year. Romanow stepped down as chief executive officer in January, succeeded by Andrew Curtis. And it hired Vasili Gerogiannis as chief financial officer in October, according to his LinkedIn profile.