Canadian fintech Clearco confirmed Monday that co-founder Michele Romanow has stepped down as CEO. Andrew Curtis, an experienced financial industry executive, has been named as her replacement effective immediately. The SoftBank-backed company has also cut approximately 25 per cent of its staff, totalling 50 employees, adding to job reductions it made just months ago. Over the past year, The Logic has been breaking news about the challenges the company has been facing and named Romanow as one of tech’s newsmakers of the year.
Here’s what you need to know about the company’s latest turn of events:
Who’s in, who’s out: This is Clearco’s second CEO shakeup over the past 12 months. In February 2022, Andrew D’Souza, who was CEO for seven years, posted on LinkedIn that he would be handing the reins to Romanow, formerly company president, and moving into the executive chairman role. In that same announcement, D’Souza announced that he and Romanow were no longer dating. As Romanow now leaves her role as CEO, she joins D’Souza as co-executive chair. The Information first reported the news.
In an email, Nick Rosen-Wachs, head of global communications at Clearco, said Romanow made the decision herself to resign for the “benefit and future success of the company.” The appointment of Curtis, a former New York-based investment banker, comes six months after he joined Clearco as an adviser.
“With the current macroeconomic environment still unstable, it was more important than ever that we had someone with a significant financial services background leading this company,” Rosen-Wachs wrote.
In an emailed statement, Santi Subotovsky, a Clearco board member and general partner at Emergence who also sits on the board of Zoom, said “Clearco, like all other companies, has gone through significant growing pains over the past year but we’re incredibly confident the future of Clearco is bright with Andrew Curtis as CEO. His resume and experience speaks for itself and is exactly what Michele, Andrew D’Souza and the entire board were looking for when we embarked on this CEO search.”
Layoffs pile up: Clearco is one of many tech companies weathering a storm of macroeconomic challenges.
“We simply hired too quickly, growing our headcount beyond the demand of the current e-commerce landscape,” Rosen-Wachs said. He added that while Clearco tried to make internal changes to avoid the layoffs, the company had to adapt as part of its ongoing efforts to reach near-term profitability. Currently, 140 employees remain.
In the spring of 2022, Clearco began quietly reducing its staff, making some employees question whether the company was being transparent about necessary cuts. In July, Clearco laid off 125 people or roughly a quarter of its employees.
The money: Last year, Clearco raised two rounds of funds in equity—approximately US$60 million in early 2022 and approximately US$30 million between October and December, Rosen-Wachs said.
With the latest funding, Clearco intends to provide corporate-level liquidity for a controlled growth plan to help the company achieve profitability, Rosen-Wachs said. He did not confirm specific investors but said they were all existing backers. Romanow and D’Souza reportedly personally invested $8.2 million last October.
