Cannabis e-commerce platform Dutchie announced a $200 million Series C round of funding that the 3 1/2-year-old company said values it at $1.7 billion. The round was led by investment firm Tiger Global Management with participation from new investors Dragoneer and DFJ Growth; and existing investors Casa Verde Capital, Thrive Capital, Gron Ventures, and Howard Schultz of Starbucks fame.
"I really think it's a testament to the industry as a whole that there's now blue-chip, tier-one investors that are really taking a close look and putting their bet on the cannabis space," Dutchie CEO Ross Lipson told Cheddar.
Tiger Global made a name for itself in Silicon Valley for early investments in tech companies like Facebook and LinkedIn, according to CNBC. It has since invested in big names like Alibaba and Netflix, as well as companies like AllBirds, Postmates, and Instacart.
"We work with companies that have the potential to reshape major parts of the global economy," John Curtius, partner at Tiger Global, said in a statement. "Our investment will help Dutchie extend its platform and deepen relationships with merchants, consumers, and brands to drive better outcomes for all in this ecosystem. We look forward to supporting this world-class team as they hit a new phase of growth."
Dutchie isn't Tiger Global's first cannabis investment. It previously invested in cannabis point of sale software company Greenbits, which Dutchie also announced it acquired along with enterprise retail planning software company LeafLogix, which provides seed-to-sale tracking. Terms of the acquisitions were not disclosed.
Lipson said adding Greenbits and LeafLogix to Dutchie's platform, which Lipson previously described as an online marketplace like "Shopify meets Doordash" for cannabis, creates a one-stop-shop cannabis software solutions for dispensaries and retail shops.
"A big goal of ours and a true north metric is to provide value to the dispensaries and our end consumers," Lipson said. "Bringing the combinations of these three companies ultimately allows us to hit our goal, which is again to provide value to our dispensaries and our consumers by bringing them an all-in-one technology platform that really streamlines that operation."
Dutchie saw tremendous growth amid the coronavirus pandemic as dispensaries and retail shops scrambled to provide contactless and low-contact shopping options for their customers. Lipson said the company doubled its headcount within the past year and signed "thousands of dispensaries" across new markets in the U.S. and Canada, but he did not clarify how many. Within the first two months of the pandemic, however, the company reported it added 450 dispensary partners.
"I think [the pandemic] moved the industry a few years forward in a matter of a few months. And what that did was push companies like Dutchie. In order to stay at the forefront, and meet the needs of the dispensaries, it was time that we brought on new products, their staff to streamline the operations for them, to ultimately allow the dispensaries to keep up with this fast-changing industry," Lipson said.
Dutchie intends to use the $200 million in funding to continue that growth by investing in three key areas. First, it intends to invest in its team, using the capital to attract world-class talent. Second, the company plans to fund product development to keep up with the changing needs of dispensaries. Lipson didn't rule out additional acquisitions. Lastly, Dutchie intends to expand, particularly to promising new markets like New Jersey, which just legalized adult-use cannabis, and New York, which is still working on it. The company currently operates across 36 states or territories in the U.S. and Canada.