ClearCommerce Corp. Processes $9.5 Million Venture Capital Transaction

Its wake littered with fallen dotcom clients and a rescinded IPO filing, online transaction software provider ClearCommerce Corp. kept its head above water last week, announcing the completion of a $9.5 million round of venture capital financing. The Series D deal follows a $30 million mezzanine round the Austin, Texas-based firm completed last summer, and is its first fund-raising effort since pulling the plug on a proposed $57.5 million IPO.

“When we pulled the S-1 in November, we knew we would have to go out and raise some more cash to help us get to profitability,” said Robert Lynch, president and chief executive with ClearCommerce.

After trying to hit up some new venture firms for the round, Lynch settled on a syndicate of existing backers and one new strategic player. Austin Ventures led the deal, and set the down-round term sheet alongside New Enterprise Associates and Voyager Capital. Other previous institutional investors included Financial Technology Ventures, Hewlett-Packard Co., Intel Capital and Internet Capital Group, with Internet security provider VeriSign Inc. also coming on board.

“I view this company as one that provides online solutions for processing payments, but it’s diversified its target markets and has signed up a lot of strong multi-channel clients,” said Bill McAleer, managing director with Voyager Capital. “We keep investing in them because they are market leaders in their space.”

McAleer added that the Series D transaction’s lowered post-money valuation – approximately $60 million compared to $113.2 million on the Series C offering – was a result of overall market conditions, rather than anything specific to ClearCommerce itself.

He also expressed confidence that the recent travel scare would not hurt ClearCommerce, despite its recent jump into the online travel space with new clients like Orbitz LLC and Cheaptickets Inc. Other major ClearCommerce customers include Apple Computer Inc., Adobe Systems Inc., Corvis Corp., LLC, Swatch and Mary Kay Inc.

The company does not plan to launch another venture round, as it plans to be in the black early next year.

Dan Primack can be contacted at