Dutchie, a four-year-old, Bend, Oregon company that charges cannabis dispensaries a monthly fee to create and run their websites and manage orders, is on a roll this year, raising its second large round of funding — this time a $350 million Series D at a $3.75 billion valuation.
The new valuation is more than double what was announced in March when Dutchie brought in $200 million in Series C funding at a $1.7 billion valuation. At the time, the valuation was roughly eight times the $200 million valuation the company had after closing on $35 million in Series B funding last August.
The latest funding round is led by D1 Capital Partners, with participation from existing investors, including Tiger Global, Dragoneer, DFJ Growth, Thrive Capital, Gron Ventures and Casa Verde Capital. New investors include Willoughby Capital, Glynn Capital and Park West Asset Management. The latest funding round boosts the company’s total funding to over $600 million.
Dutchie co-founder and CEO Ross Lipson spoke to me yesterday about the company’s serious tailwinds, driven by the societal shift of wider adoption of cannabis products, health and wellness benefits and more states passing friendlier regulations.
“The verdict is out, and cannabis is a force for good. That is the biggest development we are excited about,” Lipson told TechCrunch. “The cannabis space is the fastest growing industry, up 35% year over year. Dutchie is working with over 5,000 dispensaries in North America and processed $14 billion in annualized sales for those dispensaries. We’ve seen 100% year over year growth with dispensaries.”
Indeed, Dutchie is continuously working to propel the industry forward with continuous education on the benefits of cannabis and backing more legalizations and regulatory work. Cannabis is seeing more startups bringing technology into the fold, attracting talent and investment. In April, Crunchbase reported that $357 million was invested into cannabis companies so far in 2021, while forecasters say cannabis will be a $100 billion industry in the U.S. by 2030.
Earlier this year, TechCrunch spoke to cannabis venture capital investors. Morgan Paxhia, managing director of Poseidon Investment Management, said that “2021 could be nothing short of amazing for our industry. We expect capital flows to pick up massively from pent-up demand, good public markets bringing more IPOs, lots of M&A and new innovative startups coming on scene.”
Meanwhile, Lipson said Dutchie had a long relationship with D1 Capital, and along with existing investors, kept in constant communication about the business and its customers. To keep up with demand, both Dutchie and D1 decided it was the right time for an investment to accelerate the mission to streamline dispensary operations.
Dutchie has already made a $100 million commitment to invest in R&D over the next 12 months, so that is where some of the new funding will be deployed, Lipson said. He is also adding to the company’s employee base of 500 people across 40 states and Canada.
Now that the company has entered Series D territory, I asked Lipson if an IPO was part of the company’s future goals, and he said “we are always looking at all opportunities.”
As for the future of the cannabis industry, he said we will continue to see adoption across all areas, especially as more people are educated on finding the right product and modality and more states legalize cannabis.
“There are more initiatives, like the Safe Banking Act to help banks provide services for cannabis-related businesses and the More Act,” he added. “We don’t see federal legalization in the near term, but are optimistic that it will come.”