Dutchie is a Bend-based company, four years old, that charges cannabis dispensaries monthly fees to set up and maintain their websites.
This valuation is nearly twice what it was when Dutchie raised $200 million in Series C financing at a valuation of $1.7 billion. The company's current valuation was eight times that of the $1.7 billion valuation it had in March, when it received $35 million Series B funding.
D1 Capital Partners is leading the latest round of funding. Existing investors include Tiger Global, Dragoneer and DFJ Growth. Park West Asset Management, Glynn Capital, and Willoughby Capital are the new investors. This latest round of funding brings the total company funding to more than $600 million.
Ross Lipson, Dutchie's co-founder, and CEO, spoke to me yesterday about its serious tailwinds. These include the wider acceptance of cannabis products, the health and wellness benefits, and the increased regulatory friendliness of more states.
It is clear that cannabis is a positive force. This is the most exciting development, Lipson stated to TechCrunch. The cannabis industry is growing at 35% per year. Dutchie works with more than 5,000 North American dispensaries and has processed over $14 billion annually in sales. Dispensaries have seen a 100% increase in sales year-over-year.
Dutchie continues to push the industry forward by continuing education about the benefits of cannabis, and supporting more legalizations. Cannabis technology is attracting more investment and talent. Crunchbase reported in April that $357 million had been invested in cannabis companies in 2021. Forecasters predict that cannabis will become a $100 billion industry by 2030.
TechCrunch interviewed cannabis venture capital investors earlier this year. Morgan Paxhia is the managing director at Poseidon Investment Management and believes that 2021 will be a landmark year for the industry. Capital flows will increase dramatically due to pent-up demand and good public markets that bring more IPOs, M&A, and new innovative startups.
Lipson stated that Dutchie and D1 Capital had maintained a strong relationship over the years and kept in constant contact about the business and its customers. Both Dutchie, D1 and Lipson decided that it was time to invest to help speed up the dispensary operation's growth.
Lipson stated that Dutchie already has a $100 million commitment for R&D investments over the next 12 month. The company's 500-strong employee base is growing, with Dutchie now residing in 40 states and Canada.
After the company entered Series D territory, Lipson said that an IPO was one of the company's future goals.
He said that the future of cannabis will be a positive one, with more people being educated about the benefits and legalization in more states.
He added that there are many more initiatives such as the Safe Banking Act which allows banks to provide services to cannabis-related businesses, and the More Act. Although we don't expect federal legalization to happen in the near future, we are hopeful that it will.