Cannabis
Cannabis startup Dutchie's valuation soars to $1.7B
March 16, 2021
Dutchie, which runs a platform for ordering marijuana online, has notched a $1.7 billion valuation to become one of the most valuable venture capital-backed cannabis startups, according to PitchBook data.
The $200 million Series C, led by Tiger Global with new investors Dragoneer Investment Group and DFJ Growth, catapulted the company's valuation to more than eight times its $205 million value last August, according to PitchBook data.
Dutchie's financing round was also one of the largest ever for a cannabis startup, PitchBook data shows. It drew return investors Thrive Capital, Snoop Dogg's Casa Verde Capital, Gron Ventures and former Starbucks CEO Howard Schultz.
The involvement of growth equity firms in Dutchie's financing is evidence that a growing number of investors are becoming comfortable with cannabis investing, said Karan Wadhera, managing director of Casa Verde Capital, which led Dutchie's seed round three years ago.
"It was only a few years ago where we were having trouble getting meetings ... with investors for our fund," he added.
In addition to the cash haul, Oregon-based Dutchie has acquired Greenbits and LeafLogix, which both make enterprise software for marijuana dispensaries. And it named Tim Barash as executive chairman; he was the chief financial officer at fast-growing restaurant software company Toast. The company declined to disclose financial terms of the acquisitions.
Greenbits was valued at $58 million last year and was also backed by Tiger Global and Casa Verde, according to PitchBook data. LeafLogix has received funding from Salveo Capital and Tupancy Capital, and was valued at $13.9 million in 2019, the data shows.
Funding for VC-backed cannabis companies took off in 2019 to hit a peak of $3.2 billion across 351 deals. But deal value fell 58% year-over-year to less than $1.4 billion in 2020, according to PitchBook data.
The industry received a significant boost last year as marijuana use surged, with states including California, Washington and Colorado notching record-high pot sales.
The pandemic forced cannabis dispensaries, like other brick-and-mortar shops, to adopt digital tools to facilitate online ordering, Wadhera said.
Dutchie's platform, which lets people order cannabis products online from dispensaries for local pickup, was well-positioned for the shift. The new financing will be used for hiring, product development and expanding to new markets.
Five US states have voted to make recreational marijuana use legal in recent months, and 14 now allow or plan to allow such use. The stream of ballot box victories have helped to buoy the outlook for pot-focused startups.
Other notable cannabis deals from the past year include marijuana retailer Ascend Wellness Holdings, which raised $68 million last August, and wholesale cannabis marketplace LeafLink, which took in a $40 million Series C in December on top of a reported $250 million in debt funding earlier in the year.
Hip hop artist and entrepreneur Shawn “Jay-Z” Carter has also gotten into the cannabis market, launching a fund aimed at investing in minority-owned cannabis startups. The fund was a part of a deal with blank-check company Subversive Capital Acquisition Corp., which acquired cannabis companies CMG Partners and Left Coast Ventures earlier this year.
Last October, Carter launched his own cannabis line dubbed Monogram, which will be a joint venture with the newly combined company, named TPCO Holding.
Featured image via Heath Korvola/Getty Images
The $200 million Series C, led by Tiger Global with new investors Dragoneer Investment Group and DFJ Growth, catapulted the company's valuation to more than eight times its $205 million value last August, according to PitchBook data.
Dutchie's financing round was also one of the largest ever for a cannabis startup, PitchBook data shows. It drew return investors Thrive Capital, Snoop Dogg's Casa Verde Capital, Gron Ventures and former Starbucks CEO Howard Schultz.
The involvement of growth equity firms in Dutchie's financing is evidence that a growing number of investors are becoming comfortable with cannabis investing, said Karan Wadhera, managing director of Casa Verde Capital, which led Dutchie's seed round three years ago.
"It was only a few years ago where we were having trouble getting meetings ... with investors for our fund," he added.
In addition to the cash haul, Oregon-based Dutchie has acquired Greenbits and LeafLogix, which both make enterprise software for marijuana dispensaries. And it named Tim Barash as executive chairman; he was the chief financial officer at fast-growing restaurant software company Toast. The company declined to disclose financial terms of the acquisitions.
Greenbits was valued at $58 million last year and was also backed by Tiger Global and Casa Verde, according to PitchBook data. LeafLogix has received funding from Salveo Capital and Tupancy Capital, and was valued at $13.9 million in 2019, the data shows.
Funding for VC-backed cannabis companies took off in 2019 to hit a peak of $3.2 billion across 351 deals. But deal value fell 58% year-over-year to less than $1.4 billion in 2020, according to PitchBook data.
The industry received a significant boost last year as marijuana use surged, with states including California, Washington and Colorado notching record-high pot sales.
The pandemic forced cannabis dispensaries, like other brick-and-mortar shops, to adopt digital tools to facilitate online ordering, Wadhera said.
Dutchie's platform, which lets people order cannabis products online from dispensaries for local pickup, was well-positioned for the shift. The new financing will be used for hiring, product development and expanding to new markets.
Five US states have voted to make recreational marijuana use legal in recent months, and 14 now allow or plan to allow such use. The stream of ballot box victories have helped to buoy the outlook for pot-focused startups.
Other notable cannabis deals from the past year include marijuana retailer Ascend Wellness Holdings, which raised $68 million last August, and wholesale cannabis marketplace LeafLink, which took in a $40 million Series C in December on top of a reported $250 million in debt funding earlier in the year.
Hip hop artist and entrepreneur Shawn “Jay-Z” Carter has also gotten into the cannabis market, launching a fund aimed at investing in minority-owned cannabis startups. The fund was a part of a deal with blank-check company Subversive Capital Acquisition Corp., which acquired cannabis companies CMG Partners and Left Coast Ventures earlier this year.
Last October, Carter launched his own cannabis line dubbed Monogram, which will be a joint venture with the newly combined company, named TPCO Holding.
Featured image via Heath Korvola/Getty Images
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