Life is a fickle thing. Just ask Michele Romanow. One day you’re the face of a Heineken advertising campaign. The next, you’re stepping down as the CEO of your company.
What happened: The entrepreneur and Dragon’s Den Star stepped down as CEO of Toronto-based Clearco, marking the end of a rocky 11-month tenure. At the same time, the company laid off 26% of its staff—its third major headcount reduction since July.
- Like many other tech companies, Clearco tried (in hindsight) to scale a little too quickly amidst a pandemic-fuelled e-commerce boom.
- The company has also tightened its underwriting practices, increased fees, exited foreign markets, and hired consultants to explore a possible sale.
Why it’s happening: Clearco, a business that finances e-commerce start-ups, has been especially hard hit by rising interest rates, which make loans less attractive and heighten the risk that borrowers might default, and inflation, which has dampened consumer demand.
Why it matters: Last year, Canada’s tech industry shifted from prioritizing growth (at all costs) to turning a profit. Clearco’s most recent moves signal that, on second thought, breaking even sounds pretty good too!
Zoom out: Clearco might not be Shopify big, but it’s still another Canadian tech unicorn (bagging a US$2 billion valuation not too long ago) and a major point of industry pride that was lauded for backing a high rate of female- and BIPOC-led ventures.