In the latest sign that cannabis technology is on track, Philo has raised $40 million in a Series C round. The software company plans to use the new funding to make key hires and explore deals. Fyllo CEO Chad Bronstein said such deals could take place within the cannabis industry or outside of it.
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Cannabis technology company Fyllo is on a roll.
The data and compliance software startup serving the cannabis industry has raised $40 million in a Series C funding round, just seven months after raising $30 million.
Since August 2020, the company has raised nearly $100 million to grow its services and make significant deals in this space.
Chad Bronstein is the CEO of cannabis technology company Philo. Philo
Fyllo CEO Chad Bronstein told Insider the funding will be used to drive growth, continue to hire top talent and pursue strategic M&A. . Bronstein also said the company is considering going public in the near future.
The round was led by Ricky Sandler's Eminence Capital, a long/short fund with more than $7.5 billion under management. New investors in this round include Longview Capital Advisors and ArrowMark Partners. Previous investors including JW Asset Management, Salveo Capital and Fito Partners also participated in the round.
Bronstein declined to disclose the company's valuation.
Mainstream investors are slowly getting used to the idea of betting on cannabis tech companies. While cannabis tech companies are not directly involved in the plant, they are helping to service a multibillion-dollar industry as they navigate complex regulatory hurdles while processing large amounts of sales.
Although marijuana is federally illegal in the United States, many states have legalized it for both medical and recreational use.
Meanwhile, cannabis software is gaining traction in an industry that has struggled in recent months. Dutchee, another cannabis technology startup, raised $350 million in October from big-name funds like Dan Sundheim's D1 Capital, as well as other sector funding and an initial public offering, at a valuation of 37. won $50 million.
Mr. Philo becomes “active” in M&A
Screen capture of Fyllo's interface. Philo
Bronstein said the company is “actively” considering strategic acquisitions, including both cannabis and non-cannabis data companies.
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“If you can find a company with good technology, good people and good data, it's kind of a triple threat,” he said.
Fyllo's services extend beyond cannabis. Its platform includes compliance, media, data and regulatory services, and its client list ranges from the nation's largest cannabis companies to large consumer goods companies seeking insights about cannabis consumers.
In recent months, Fyllo has hired executives from Twitter, Salesforce, Thomson Reuters and Trip Advisors.
Back in April, Bronstein said his company aims to grow to 200 employees by the end of 2021. The company currently has 194 employees and continues to “replenish its workforce across the board,” he said, adding that it expects the number of employees to grow to about 300. At some point next year.
CEO Chad Bronstein at the opening of Fyllo's Chicago office (pre-pandemic). Philo
Philo's investor base is also becoming more diverse. Bronstein told Insider earlier this year that 60% of the money raised in the Series B funding round came from non-cannabis investors, mostly family offices.
Bronstein added that Philo is projecting revenue growth of 3x year-over-year, but that figure does not include any deals the company may make.
Going forward, Bronstein says Philo could go in one of two directions. The company could continue to grow with venture capital or decide to go public soon through a traditional IPO.
“There's a lot of opportunity in this space right now,” Bronstein said. “My job as a founder is to look at opportunities and make sure the investors, the company, and the founders all have the right opportunities.”
