By John Schroyer
Colorado-based MJ Freeway, one of the most prominent cannabis-related software companies in the nation, announced this morning that it has completed an $8 million round of fundraising.
The figure could be a record-setter in terms of capital raised by a software firm focused on the marijuana industry.
Co-founders Amy Poinsett and Jessica Billingsley told Marijuana Business Daily that a number of investors participated in the round, including San Francisco-based Tao Capital Partners and longtime investor Roger McNamee.
McNamee said in a statement that the company is “positioned to be the leading software platform in cannabis.”
MJ Freeway will use the money to grow the business significantly and enhance some of its existing offerings, such as its operational services for clients that want to learn how to best utilize the company’s data.
“We’re looking at a lot of hiring. We’re anticipating that we’ll double the size of our team over the next few months,” Poinsett said.
The company currently has about 35 employees and services 1,200 legal cannabis licensees in 23 states and Canada, Chile, Australia and Spain.
The $8 million funding round isn’t MJ Freeway’s first foray into raising capital.
The company completed a Series A round in January (the terms of which have not been disclosed). Tao Capital – a San Francisco-based investment firm that has also pumped money into well-known mainstream companies such as Tesla and Uber – participated in that round as well.
“One thing that we heard from the investors that we spoke to… is they really appreciated the fact that MJ Freeway had become profitable, and had demonstrated consistent growth,” Poinsett said.
Billingsley added that MJ Freeway’s revenues have consistently doubled since its founding in 2010, and in 2014 alone the company raked in “just over a couple million.” MJ Freeway expects revenues to double this year and again in 2016 as the legal marijuana market continues to expand. Part of the company’s future focus will also be on bidding for state contracts that hire private software companies to design cannabis tracking systems.
MJ Freeway has received a good bit of attention from various venture capital firms as the marijuana trade continues to explode, Billingsley and Poinsett said.
The overall momentum of the industry, combined with the optimism of how much more the trade can grow all over the globe, has been making it much easier for companies in the cannabis space to raise funds.
“The attention that the market has gotten in recent months and the last year has really made a difference,” Poinsett said. “We’ve seen a lot of interest from a number of mainstream venture capital firms.”
That bodes well for other cannabis companies seeking money, especially with investment firms such as Tuatara Capital and Privateer Holdings continually looking to invest big sums.
John Schroyer can be reached at [email protected]