Flowhub, the leading cannabis retail management platform for modern dispensaries, announced it has raised an oversubscribed $23 million Series A financing round led by e.ventures, Evolv Ventures — the venture fund backed by Kraft Heinz — and Poseidon, with contributions from investors 9Yards Capital, former NBA commissioner David Stern and Iqram Magdon-Ismail, the co-founder and former CEO of Venmo, among others. As one of the largest Series A rounds in the cannabis tech industry, this investment is set to position the company as the SaaS solution of choice for solving today's complex cannabis retail challenges.
With the legal cannabis market expected to reach over $66 billion by 2025, dispensaries are expanding across the U.S. to fulfill the growing need for medicinal and adult-use cannabis. To maintain a successful, legal and compliant operation, these companies need a strategic partner like Flowhub to help them continue to scale their operations to keep up with consumer demands as well as evolving state regulations.
"What we are experiencing right now is an end to cannabis prohibition and Flowhub is on the front lines of this movement," said Kyle Sherman, founder, and CEO, Flowhub. "Every legal transaction completed with the Flowhub retail platform is a positive step forward, and we are committed to helping our customers build thriving cannabis businesses. With this investment, we will continue to automate the cannabis supply chain, retail and reporting processes and bring to market technology solutions that are not only shaping the cannabis retail business, but also driving forward the future of legalization and de-stigmatization."
Flowhub has experienced tremendous growth over the last year, increasing revenue by 200 percent and doubling its customer base across 11 markets, which includes household brands like Cookies, Dr. Greenthumb's, Green Dragon, Nectar and Starbuds. The company also added strategic roles to its executive team — including SaaS enterprise tech leader Dave Smith as CRO — grew its female leadership across key strategic business roles such as marketing, product management, and finance and has already increased headcount by 50 percent in 2019. Flowhub also recently announced its new headquarters at the former Slack HQ near downtown Denver's Union Station and three satellite offices to support continued expansion efforts.
"We are excited to join Flowhub at such a crucial time in the company's overall growth journey," said Jett Fein, partner, e.ventures. "As the demand for legal cannabis products rises across the U.S., Flowhub is focused on using technology to advance the future of the cannabis industry and has built a cloud platform with a suite of applications that enables dispensaries to provide superior and tailored consumer retail experiences in this highly regulated industry. We support their mission and look forward to their continued success."
On the heels of this announcement, the company debuted significant enhancements to the Flowhub platform making it even easier for customers to run and grow their dispensaries. These platform enhancements include the Stash app, the industry's first mobile inventory management solution that maximizes efficiency and accuracy, the Cashier app for enhanced front-of-house point-of-sale capabilities with iPad/tablet compatibility, Specials engine for managing discounts across all stores and Order Ahead with integration partner Dutchie for a streamlined in-store pick-up process. Flowhub also added new technology integrations with LeafBuyer and Leafly as part of its commitment to creating a robust partner ecosystem that enables customers to build their own custom cannabis tool stack.
"Cannabis is not an industry that you just jump right into," said Emily Paxhia, managing director, Poseidon. "The compliance and regulation aspects make this a unique industry and Flowhub is one of the leading cannabis tech companies that is taking a meticulous and strategic approach. We saw the potential for Flowhub's technology and mission early on and we're thrilled to continue to support them in delivering the cannabis retail experience of the future."
The $23 million of financing closed on this round brings the company's total funding to $27 million. This marks the first cannabis tech investment from round leaders Evolv Ventures and e.ventures and is indicative of the increased appetite to bet big on a maturing market segment with an industry leader like Flowhub. With this injection of capital, the company will continue to invest in product innovation, hire top technical talent and expand its partner ecosystem with future technology integrations and collaborations through an open API approach.
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