What is ClearScore Business Model?
One of ClearScore’s primary services is to help consumers improve their credit ratings for no charge.
Signing up is all it takes for customers to get a personal credit report. After then, a monthly report is given out. Notifications will be sent to users if anything changes.
In order to increase one’s credit score, ClearScore provides a wide range of options. People’s personal financial objectives may be met with the help of free coaching programs that provide customized action plans.
Users may then look back over the last six years at their credit score’s progress on a dedicated timeline. As an additional benefit, ClearScore monitors your finances and analyses what influences them.
In addition, customers may choose from a wide range of options to suit their budget. Credit cards, loans, mortgages, and other types of insurance are just a few examples.
Regulated by Financial Conduct Authority and adhering to 2018 Data Protection Act are ClearScore’s top priorities. Aside from checking whether a user’s data has been hacked and is being used for harmful purposes, it constantly crawls the dark web.
Equifax and Experian are the two licensed credit reference organizations from which ClearScore obtains its credit score data, which is then based on the country of operation. Currently, ClearScore may be used in the United Kingdom, Australia and South Africa.
On its website or through its mobile app, ClearScore may be viewed (available for Android and iOS devices).
The ClearScore Company’s Origins and Development
Justin Basini and Dan Cobley, the co-founders of ClearScore, formed the company in 2014 and it has its headquarters in London, United Kingdom.
Basini has almost a decade of experience as an entrepreneur and business leader before launching the firm. He has previously worked in marketing for a number of different firms, including Procter & Gamble, Deutsche Bank, and Capital One.
In 2010, he founded ALLOW, a data-protection startup that failed. Basini joined Zapp Mobile Payments after the company went bankrupt in 2013.
After a year, though, the lure of entrepreneurship was once again strong. He hired Cobley, a nine-year Google veteran who climbed to the position of managing director for the United Kingdom market.
At the time, incumbents such as Experian controlled the market for checking one’s credit score and paid customers for the same reports. There were almost 15 million individuals in the United Kingdom who hadn’t seen their credit score information.
ClearScore was likely influenced by Credit Karma, which had been introduced in 2007 and was causing quite a stir in the financial services business in other countries.
When Basini and Cobley launched their company in June 2015, they received an unknown seed round from Blenheim Chalcot. The fact that ClearScore had to pay Experian competitor Equifax to acquire access to that data meant that raising funds was an unavoidable evil.
In December of that year, ClearScore was made public for the first time after a year of hard effort.
QED Investors (headed by Nigel Morris, the co-founder of Capital One) and Lead Edge Capital (a private equity firm) provided an undisclosed Series A round in June 2016. Over two million clients had been signed up by the firm by the end of the month.
It wouldn’t be long before other entrepreneurs started paying attention. After ClearScore, companies like Freescore and Noddle took advantage of the same opportunity. Although Experian had previously made its credit ratings accessible for free, ClearScore’s success led them to do so.
Since then, ClearScore has received several honors, including being named one of the UK’s 50 fastest-growing FinTech firms (February 2017), earning the Venture-Funded Business of the Year award (December 2016), and being a member of the Future Fifty growth program (February 2017). (August 2017).
For £275 million, Experian acquired ClearScore, bringing together the UK’s top two credit scoring businesses. This acquisition was announced in March of this year. A few weeks later, ClearScore entered its first overseas market, South Africa.
By the end of July, ClearScore had already amassed a global user base of seven million. In addition, it began operations in India, a market with a population of over 300 million people, all of whom may use its products and services.
Unfortunately, things didn’t always go as planned. Antitrust authorities in England and Wales initiated an investigation in July 2018 amid concerns that the purchase will create unfair market circumstances.
It became worse when Credit Karma (headquartered in the United States) purchased Noddle (located in the United Kingdom) in November. Both Experian and ClearScore finally called off the acquisition in February 2019 since the CMA would not approve it owing to “acceptable conditions.”
It was now a matter of establishing the most trusted name in credit monitoring, not only in the UK, but globally. By the end of July, it had passed the 10 million user threshold for the first time. The company’s two overseas marketplaces are responsible for 1.5 million of them.
Some of these markets, on the other hand, may not survive indefinitely. ClearScore had to shut down its India operations in April 2020 because of financial restrictions brought on by the coronavirus outbreak. Additionally, it was forced to let go of 20 staff.
The door to India had been closed, but a fresh chance was just around the corner. ClearScore joined Australia in May of this year. Additionally, ClearScore Protect was created, allowing consumers to keep tabs on whether or not their personal information has been misused.
ClearScore was able to sign a few additional agreements during the remainder of 2020, including one with Netacea, to safeguard its users from credential stuffing attempts and account takeovers. Finally, ClearScore confirmed its sponsorship of Fulham FC and placement on the team’s left sleeve as a way to round off 2018.
ClearScore’s strategy for 2021 was to keep doing the same things that were previously working, such as signing new partnerships and releasing new features. Invus Opportunities, a US-based hedge fund, invested $200 million in the company in June in recognition of its rapid expansion.
As a result, ClearScore was able to double its workforce and bring in seasoned executives like Grant Foley, the company’s new CFO.
ClearScore now boasts 14 million users worldwide, with 11% of those users located in the United Kingdom. Furthermore, the organization has a workforce of about 500 individuals.
How Does ClearScore Make Money?
Commissions on product recommendations and membership fees for premium services are how ClearScore generates money.
Each of them will be examined in further detail in the next section.
Fees for Referrals
ClearScore makes the vast majority of its money from commissions it gets for effectively referring customers to other companies’ products.
Users of ClearScore, like those of Credit Karma, may compare and sign up for a wide range of services, including credit cards, loans, and auto insurance.
Having access to financial data on each consumer, ClearScore may provide more specific suggestions, increasing the likelihood of a sale.
A range of compensation options are available to ClearScore. When a consumer joins up for the service that it suggests, it usually receives a flat or percentage-based compensation.
As an additional option, certain partners may pay ClearScore for clicks on their ads using a cost-per-click (CPC) model.
The fact that advertisers may both gain trustworthy clients (i.e., those who are likely to pay back a loan or have a low level of debt) and tap into a customer base engaged only in personal finance motivates them to partner with ClearScore.
It was in April 2021 that ClearScore launched Protect Plus, an identity protection and fraud prevention solution for internet users.
Checks to see whether any of your credentials have been sold on the dark web are carried out by the service. The subscription version checks this data every day, but the free version only does so every three months.
Customers must pay a monthly or annual membership charge of £4.99 or £49.99 to have access to the premium version.
More frequent scanning is just one perk for customers; they can also offer more email addresses to be examined, as well as benefit from other services like live chat and pre-scheduled phone calls.
ClearScore Funding, Revenue & Valuation
According to Crunchbase, ClearScore has received $200 million in equity capital in four stages.
Blenheim Chalcot, Lead Edge Capital, QED Investors, Future Fifty, and Invus Opportunities are among the investors in the firm.
Invus Opportunities, a global equity investor, valued ClearScore at $700 million when it invested in the firm in June 2021.
ClearScore has made a profit of £57 million in the fiscal year 2019. However, numbers for 2020 and 2021 haven’t been made public.