Dutchie Doubles Valuation After New Funding

Dutchie Secures $350 Million in Series D Funding

Dutchie, a Bend, Oregon-based company established four years ago, is experiencing significant growth. The firm provides a subscription service to cannabis dispensaries, handling website creation, order management, and related operations.

Rapid Valuation Increase

This year has been particularly successful for Dutchie, culminating in a new funding round of $350 million in Series D. This investment values the company at $3.75 billion.

The current valuation represents more than a doubling of the $1.7 billion valuation achieved in March during the Series C funding round of $200 million. Previously, in August of last year, the company secured $35 million in Series B funding, resulting in a valuation of $200 million – roughly eight times lower than the current figure.

Investment Details

D1 Capital Partners spearheaded the latest funding round, with contributions from existing investors. These include Tiger Global, Dragoneer, DFJ Growth, Thrive Capital, Gron Ventures, and Casa Verde Capital.

Additionally, new investors such as Willoughby Capital, Glynn Capital, and Park West Asset Management participated. This latest influx of capital brings Dutchie’s total funding to over $600 million.

Industry Tailwinds and Growth

Dutchie’s co-founder and CEO, Ross Lipson, highlighted the positive trends driving the company’s success. These include increasing societal acceptance of cannabis products, recognized health and wellness benefits, and the ongoing legalization efforts across various states.

“The benefits of cannabis are becoming increasingly clear, and it’s viewed as a positive force,” Lipson stated to TechCrunch. “The cannabis sector is currently the fastest-growing industry, demonstrating a 35% year-over-year increase. Dutchie collaborates with over 5,000 dispensaries throughout North America, facilitating $14 billion in annualized sales. Dispensaries utilizing our platform have experienced 100% year-over-year growth.”

Commitment to Industry Advancement

Dutchie is actively involved in promoting the cannabis industry through education regarding its benefits and by supporting legalization and regulatory initiatives. The sector is attracting increasing technological innovation, talent, and investment.

Crunchbase reported in April that $357 million had been invested in cannabis companies in 2021 alone. Forecasts predict the U.S. cannabis market will reach $100 billion in value by 2030.

Investor Outlook

Cannabis venture capital investors have expressed optimism about the industry’s future. Morgan Paxhia, managing director of Poseidon Investment Management, predicted a strong year for the sector, anticipating increased capital flow, more initial public offerings (IPOs), mergers and acquisitions (M&A), and the emergence of innovative startups.

Strategic Investment and Expansion

Lipson noted a long-standing relationship with D1 Capital and consistent communication with existing investors regarding the company’s performance and customer base. Both Dutchie and D1 determined that an investment was necessary to accelerate their mission of optimizing dispensary operations.

Dutchie has already committed $100 million to research and development (R&D) over the next 12 months, and the new funding will be allocated to this effort. The company is also expanding its workforce, currently comprising 500 employees across 40 states and Canada.

Future Plans

When questioned about a potential initial public offering (IPO), Lipson indicated that the company is evaluating all available options.

He anticipates continued growth in cannabis adoption, particularly as more individuals become informed about product selection and usage, and as more states legalize cannabis.

“Legislation such as the Safe Banking Act, aimed at enabling banks to serve cannabis-related businesses, and the More Act are also significant developments,” Lipson added. “While we don’t foresee immediate federal legalization, we remain optimistic about its eventual occurrence.”