Kraft Heinz (NASDAQ: KHC) has made its first foray into the cannabis space by leading a $23 million investment in marijuana technology start-up Flowhub.
Denver-based Flowhub provides software for cannabis retailers covering inventory tracking, point of sale, compliance, and more. It caught the eye of Evolv Ventures, the incubator and venture capital subsidiary established by Kraft Heinz to invest in innovative, emerging tech companies with transformative potential.
Kraft Heinz, the world’s fifth largest food company, invested $100 million in Chicago-based Evolv Ventures and brought in venture investor Bill Pescatello to lead the fund. CBD products are firmly on its radar.
The $23 million investment is one of the largest Series A rounds for a cannabis tech provider. Evolv Ventures led the round along with e.ventures and Poseidon, while 9Yards Capital and Iqram Magdon-Ismail also contributed.
It is a roundabout entry into the cannabis sector for Kraft Heinz, which reported annual sales of $26.2 billion in 2018, but it is interesting to see it dipping a tentative toe into the industry.
“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,” said Flowhub founder and chief executive Kyle Sherman.
The firm has doubled revenue over the past year after growing its customer base in 11 markets. It works with brands like Cookies, Dr. Greenthumb’s, Green Dragon, Nectar, and Starbuds.
The investors praised its innovative cloud platform, which offers cannabis retailers a tailored experience and covers ID verification, check-in, queue management, back of house, and many more functions. They also hailed its meticulous and strategic approach to thriving in a sector rife with complex compliance and regulation aspects.
The $23 million financing round brings the firm’s total funding to $27 million, and it now plans to invest in product innovation, hire new staff, and expand its ecosystem.
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