ClearSale seeks roughly USD 20m from US investors; Goldman advising - CEO
by Deborah Balshem in Ft. Lauderdale August 24, 2016
ClearSale, the São Paulo, Brazil-based provider of fraud detection and charge-back prevention solutions, is working with Goldman Sachs to raise approximately USD 20m from US investors, said founder and CEO Pedro Chiamulera.
Proceeds would be used for aggressive expansion efforts in the US and to support continued development of ClearSale’s mobile application, which was released last month, Chiamulera said.
Founded in 2001, ClearSale is the dominant player in Brazil, where it has 80% market share among e-commerce companies, according to Chiamulera. Two years ago it entered the US, where it has an office in Miami, Florida.
ClearSale is “looking for more than just money” from an investor, the CEO stressed, noting strategic expertise and relationships with e-commerce companies in the US as a key factor. ClearSale’s preference is to sell a minority stake in the business, though Chiamulera did not rule out a majority stake sale for the right deal.
Existing investors Pacific Investments and Rosenberg Partners could potentially exit in conjunction with a new raise, Chiamulera said. The two firms purchased a minority stake in ClearSale in 2010. Chiamulera, 52, and company executives Bernardo Lustosa and Mauro Back own the majority share.
ClearSale is projecting close to BRL 110m (USD 30m) in mostly recurring revenue this year, compared toBRL 87m (USD 23.8m) in 2015, according to Chiamulera. The company’s EBITDA margin is approximately 25%-27%, he added.
Multiples in the space can reach upwards of 5x revenue, though Chiamulera said pure-play IT/online companies, which usually have a low number of employees, tend to command the highest multiples. ClearSale has more than 700 employees, but has set itself apart from many peers by providing outsourcing services for the past eight years.
ClearSale provides full outsourcing services to 1,000 clients, and has an additional 2,000 clients beyond that, Chiamulera noted. Customers include Calvin Klein, Chanel, Rakuten, Ray Ban, Sony, Staples and Walmart.
In addition to e-commerce companies, ClearSale has a significant footprint among telecom customers. It more recently started targeting insurance firms and credit card providers, the CEO said.
Brazil-based Marques Rosado Toledo Cesar & Carmona Advogados is ClearSale’s law firm.
In the US, ClearSale peers include Accertify, CyberSource, Forter, Kount and Riskified, according to Chiamulera.
This past April, Forter secured USD 32m in Series C funding, led by Scale Venture Partners. In February, Riskified raised USD 25m in financing round led by Qumra Capital. In December 2015, Kount completed a USD 80m raise from CVC Capital Partners.
In 2010, American Express (NYSE:AXP) acquired Accertify for USD 150m, while Visa (NYSE:V) paid USD 2bn the same year to purchase CyberSource.
Recent industry reports estimate the fraud detection and prevention industry will expand from USD 9bn to more than USD 21bn in 2019.