Less than a month after announcing a new Denver HQ, cannabis tech startup Flowhub has closed a $23 million Series A.
Flowhub is a cannabis retail software company that helps dispensaries by delivering compliance, point of sale, inventory tracking and business intelligence data from a customizable platform.
The company processes over $1 billion in cannabis sales annually and works with more than 700 cannabis retailers and their partners.
The oversubscribed round was led by e.ventures, Evolv Ventures — the venture fund backed by Kraft Heinz — and Poseidon, with contributions from investors 9Yards Capital, former NBA commissioner David Stern and Venmo co-founder Iqram Magdon-Ismail, among others.
Over the last year, Flowhub has increased revenue by 200 percent and doubled its customer base across 11 markets, the company said. It also recently announced a new headquarters at the former Slack HQ in Denver.
With the legal cannabis market rapidly expanding across the U.S., Flowhub sees itself as a key to helping dispensaries keep up with consumer demands and stay in compliance with regulations.
"What we are experiencing right now is an end to cannabis prohibition and Flowhub is on the front lines of this movement," said founder and CEO Kyle Sherman in a statement. "Every legal transaction completed with the Flowhub retail platform is a positive step forward, and we are committed to helping our customers build thriving cannabis businesses. With this investment, we will continue to automate the cannabis supply chain, retail and reporting processes and bring to market technology solutions that are not only shaping the cannabis retail business, but also driving forward the future of legalization and de-stigmatization."
The $23 million round brings the company's total funding to $27 million and marks the first cannabis tech investment from round leaders Evolv Ventures and e.ventures.
"We are excited to join Flowhub at such a crucial time in the company's overall growth journey," said Jett Fein, partner at e.ventures in a statement. "As the demand for legal cannabis products rises across the U.S., Flowhub is focused on using technology to advance the future of the cannabis industry, and has built a cloud platform with a suite of applications that enables dispensaries to provide superior and tailored consumer retail experiences in this highly regulated industry."
Sherman said the company will use the capital for continued hiring efforts, as it currently employs 80 and has doubled staff year-over-year.
Flowhub will also grow its partner ecosystem and expand its platform capabilities, with a specific focus on matching the workflows of dispensary staff and owners.
"We'll eventually expand into the payments space to further provide secure, safe digital transactions for our customers and for the consumer," Sherman told Colorado Inno. "This is something that needs to happen. And we’re the right company to lead this movement."
