Seed-to-sale technology firm Alleaves said it raised $40 million in a Series A funding round to expedite a multi-state commercial rollout, led by investment group The Eleven Fund at a valuation of $240 million.
The financing deal comes during a time when a lack of cash is forcing cannabis companies to find new and creative ways to raise capital. The deal is Eleven Fund’s second investment, as it raised $125 million last December for Pear Therapeutics – a software-based digital therapeutics platform designed to treat disease and enhance the efficacy of pharmaceuticals.
“I have watched the cannabis industry evolve from the backwoods of society to a major US industry, said The Eleven Fund CEO Hartley Wasko, “yet the industry remains handicapped by a number of structural and regulatory factors, in addition to the challenges of what has largely been home-brewed cottage industry technology.”
While the past few years have served well enough for companies looking for an injection of investment, rising interest rates and the sobering lul of U.S. federal legalization has crimped industry optimism of companies interacting with banks and credit card companies anytime soon. Companies in other sectors of the industry such as Leaflink and Bepoke Financial have ventured to remedy this issue by expanding their fintech capabilities and implementing direct payment services.
“We are thrilled to secure this strategic capital financing to accelerate our best-in-class seed-to-sale platform,” said Alleaves CEO Michael Beedles. “Although we have been profitable since inception, this injection of capital from The Eleven Fund will accelerate our bold growth plans and expand our technology platform and commercial deployment.”
Data provided by Viridian illustrates this cash crunch, as capital raising has significantly dipped across sectors including cultivation, retail and real estate.
With the completion of the deal, Alleaves will advance a multi-state commercial rollout with other industry MSOs. In addition, the company will look to acquire and absorb complementary cannabis technology platforms to both expand its customer base and create a seed-to-sale software, transaction and compliance platform.
“As a technology investor, I have been waiting for a true enterprise class technology company to come along and usher the cannabis industry into the realm of the modern technology era,” said Wasko. “I believe that company (Alleaves) has finally arrived and is on the cusp of a major transformative growth opportunity.”
Cannabis Tech Firm Alleaves Looks to Expand, Raises $40 Million on Green Market Report.