A young Chicago startup just raised $16 million in its first-ever round of funding to help cannabis companies deliver industry-compliant ad campaigns.
Fyllo announced Wednesday that its $16 million seed round was led by New York-based JW Asset Management and Canada-based K2 & Associates, two investments firms known for backing cannabis-related businesses.
Founded just this past April, Fyllo has created a marketing tech platform for the cannabis industry that helps brands execute and create ad campaigns that comply with state and federal regulations. Marijuana and CBD companies can be fined if one of their digital ads runs in a state where their product is not allowed, or if it's seen by someone underage. Fyllo says it helps cannabis companies meet compliance requirements at scale, giving brands piece of mind that they're only advertising to their intended, legal audience.
The startup is led by co-founder and CEO Chad Bronstein, who has more than a decade of experience in the digital marketing space. He was the VP of sales at Adconion Media Group, which was acquired by large marketing tech firm Amobee in 2014. He was promoted to Amobee's chief revenue officer in 2018.
Marketing is one of the biggest problems cannabis brands face, Bronstein explained, as companies are hit with thousands of dollars in fines if their ads don't comply with the law.
"In each state there’s different regulatory laws and compliance issues that brands face," Bronstein said. "Our technology allows them to ... run advertising and provide brand safety and compliance for them."
Fyllo currently has around 20 employees, and it expects to reach 40 by October, Bronstein said. Along with its headquarters in Chicago, it also has offices in Los Angeles, Denver, New York, Toronto and Tel Aviv.
Fyllo's funding comes as the marijuana industry is heating up in Illinois---particularly on the grower and retail side. Cannabis companies like Cresco Labs, Verano Holdings and Green Thumb Industries have grown quickly as the state prepares to legalize marijuana come January 2020.
But less momentum has developed on the tech-enabled startup side in Chicago. Fyllo's growth could just be the thing that kickstarts the city's cannabis startup scene into the next gear.
