Clearbanc Launches Tool to Value Startups in Just One Day

(Bloomberg) -- Canadian alternative lender Clearbanc has launched a tool that it says can tell startup founders how much their company is worth in 24 hours, accelerating a process that can normally take weeks or months.

The product, called Valuation, uses artificial intelligence and data such as revenue and expenses to arrive at a valuation for the startup. Founders then can find potential buyers or investors and eligible companies can also receive funding from Clearbanc through a revenue-sharing agreement.

Clearbanc Chief Executive Officer and co-founder Andrew D’Souza described the program as a mix between Credit Karma, which generates credit scores and tracks them over time, and a Tinder that connects founders with investors and buyers.

“The goal is to level the playing field a little bit and empower founders with more information not only for meeting an investor or buyer, but day-to-day running a business and meeting their goals,” he said. “It provides a foundation for us to establish a baseline and then a goal, and then a roadmap.”

Clearbanc built the system by analyzing public and private data and observing what deals have been done in the past, D’Souza said. The more data that founders upload to the tool, the more accurate the valuation will be.

The new tool furthers Clearbanc’s mission of extending capital to founders who otherwise may have not been able to get it, said President and Co-Founder Michele Romanow.

“It’s the same thing, democratizing access to capital and valuation and this information,” she said. “Everyone with a great idea should be able to get access to capital, [and] people who knew the money, it wasn’t hard for people in the right circles.”

In a testing phase, Valuation has been used by thousands of companies with a combined total value on the platform of more than $32 billion, the company said. Clearbanc has so far connected more than 60 companies with venture capital investors.

©2020 Bloomberg L.P.