Drizly Group, the parent company of alcohol e-commerce marketplace Drizly and medical cannabis business Lantern, has closed $50 million in funding. Avenir, a New York-based investment firm, led the Series C round.
Founded in 2012, Boston-based online liquor store Drizly raised its first round of capital in 2014 and is now a profitable business, according to CEO Cory Rellas. The company took in external funding to scale into online sales, hire new people and increase marketing efforts to reach new customers, Rellas said.
Approximately one third of the new fund will go into Lantern, the recently launched cannabis business for certified medical patients.
The Drizly app works as an intermediary between customers and liquor stores; customers place their orders online, with the closest store in Drizly's network fulfilling and delivering the booze. Rellas said that Drizly is adding an average of 75 retail partners a week to its current pool of 3,000 across more than 30 states.
"We believe consumer shopping habits have really shifted online, not just in general, but specifically for beverage alcohol," Rellas said. "The pandemic largely just accelerated much of what was already happening."
The number of customers who have come to Drizly for the first time has grown over 750% versus the second quarter of last year, with consumer transactions through the platform increasing 350% from the first half of this year relative to the first half of last year, according to Rellas. He declined to share revenue information.
Scott Braun, the chief marketing officer at the company, told the Business Journal in May that he was observing a few changes in terms of consumer behavior since the beginning of the pandemic, with customers sending gifts to loved ones or first responders, cooking more at home or sharing a drink over virtual happy hours.
This year, the team behind Drizly launched Lantern, which started as an online ordering and delivery service for medical cannabis. Meredith Mahoney, a former vice president at online furniture marketplace Wayfair Inc. (NYSE: W), leads the team of 11 full-time members. Justin Robinson, co-founder of Drizly, also had a hand in Lantern's launch.
Drizly's headcount stands at 220 people, including 120 Massachusetts employees. With the new round, both Drizly and Lantern plan to hire new people across the country and across the business, with priority to employees in product and development, business development and finance.
Drizly raised a total of $119 million in funding, according to Rellas. Drizly Group wholly owns its two operating companies, Drizly LLC on the beverage alcohol side and Lantern LLC on the cannabis side. Tiger Global and other existing investors participated in the latest round.
