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Dutchie IPO: Is an IPO Coming In 2023?

April 22, 2023 10:43 am
Published by: David Richardson

According to reports, the US cannabis market is valued at $28 billion in 2022 and is expected to grow at a rate of 25% from 2023 to 2030. By 2030, the industry is projected to grow between $100 billion to $200 billion.

In the US, adult-use cannabis is legal in 21 states. It's a glorious time for cannabis dispensaries and cannabis investors, as the market is on an unstoppable upward trend.

One of the biggest players in the cannabis industry is Dutchie, a cannabis Point of Sale, e-commerce, and insurance platform.

With a valuation of $3.75 billion, investors are excited for an IPO. This article discusses everything you need to know about Dutchie, including the Dutchie IPO, revenue, funding rounds, and more.

What Is Dutchie?

Dutchie is a Point of Sale (PoS), e-commerce, and insurance platform that helps businesses start, grow, and operate cannabis in the safest and most legal way possible. It helps companies take online orders, manage inventory, and ensure state law compliance.

In some ways, Dutchie is the "Shopify" of the cannabis industry. The only difference is that Dutchie doesn't grow, sell, or distribute the product. It merely powers dispensary operations in a safe and accessible manner.

Dutchie operates on a monthly subscription service, ranging from $500 to $1,000 per dispensary. Currently, it operates approximately 6,000 out of the 9,000 dispensaries in the US and Canada.

Brief History of Dutchie

Founded in 2017 by brothers Ross Lipson and Zack Lipson, Dutchie was built out of the desire to make cannabis more accessible to buyers.

At the time, the prospect of ordering cannabis online was nearly nonexistent. If the brothers wanted to indulge in a bit of marijuana, they had to wait hours upon hours in front of a cannabis dispensary to get their order.

The process was tedious and time-consuming for all parties involved, and the brothers were sick of it. So they decided to do something about it.

A Billion-Dollar Idea

While waiting in line, Ross thought how nice it would be if cannabis dispensaries had their own "Amazon" platform. The idea stuck around, and Ross decided, why not digitalise the cannabis industry himself?

He had the right skills and enough cash to make it happen. He recently sold his online food-ordering business for an estimated $30 million and had nothing else to do with his free time.

"It felt like I was the right person, at the right time, at the right place," Ross said in an interview with Forbes. "It was like a light bulb went off in my head."

Excited by the possibilities, Zack dialled his older brother Ross and spoke to him about the idea. Ross encouraged Zack to go for it, stating that it was a "no-brainer" and that "he has to do it.”

Zack was just as experienced as Ross in the field of online business. He had a background in software development and dozens of startups under his belt.

The two were an unstoppable team. With Zack's skills and Ross' experience in business and sales, they had more than enough manpower to build Dutchie off the ground.

Rapid Success

The Lipson brothers launched Dutchie in July 2017 as an e-commerce software company. It’s basically a combination of Shopify and Seamless but for edibles, vapes, and marijuana. With it, customers can purchase cannabis with a few taps on their smartphone and pick the order from the nearest location.

In 2017, Dutchie was one of the few of its kind. It quickly garnered the attention of customers, businesses, and investors. One such investor was Snoop Dogg’s Casa Verde Capital, which led a $3 million seed round in 2018.

As the duo learned more about the cannabis industry, they started integrating a point of sale and a number of other features in their software.

These features attracted a lot of investors, and funds started pouring in. Dutchie went from earning around $5 million in revenue in 2020 to a staggering $45 million in 2021.

Today, Dutchie is being used by 6,000 out of the 9,000 cannabis dispensaries in the US, making it the biggest cannabis platform in the industry.

Dutchie Funding Rounds

Dutchie has raised $600 million in funding over five rounds, the most recent being Oct 14, 2021.

Date

Funding Round Type

Amount

Lead Investor

Oct 14, 2021

Series D

$350 million

D1 Capital Partners

Mar 16, 2021

Series C

$200 million

Tiger Global Management

Aug 18, 2020

Series B

$35 million

Thrive Capital

Sep 10, 2019

Series A

$35 million

Gron Ventures

Sep 24, 2018

Seed Round

$3 million

Casa Verde Capital

What Is Dutchie's Valuation?

Dutchie reached a valuation of $3.75 billion after the $350 million Series D funding round led by D1 Capital Partners.

According to the brothers, the funding will be used to expand into markets outside North America, hire employees, and create new products.

Dutchie's $3.75 billion valuation is more than double its previous valuation of $1.7 billion in 2021. And before that, Dutchie's valuation was sitting at $200 million, meaning that the company's valuation grew by an impressive 750% in under a year.

In an interview conducted by TechCrunch, CEO Ross Lipson claims that the company saw a 100% year-over-year growth with dispensaries. This makes Dutchie one of the fastest-growing industries in the market.

As more and more countries legalise the use of recreational marijuana, Dutchie's could potentially take over the cannabis market permanently.

When Is the Dutchie IPO?

As of March 2023, Dutchie has yet to announce an IPO. The company was expected to go public in 2022, but the year came and went without a peep from Dutchie's founders.

The brothers confirmed their interest in going public in 2021, stating they're "always looking at opportunities."

In 2020, five states legalized cannabis for medical and/or recreational purposes: Mississippi, South Dakota, New Jersey, Arizona, and Montana. The new development was a massive win for Dutchie, as company revenues shot up by 100% by the end of that year.

Experts believe that Dutchie is waiting for more US states to legalize marijuana before going public. The exact date, however, is anyone's guess.

The cannabis market is expected to reach $30 billion in 2025 and $100 billion in 2030, so the brothers may postpone the IPO until then.

How Does Dutchie Make Money?

According to reports, Dutchie estimated annual revenue is $356 million. Most of its revenue comes from software products, which operate on a month-to-month subscription basis. The company charges anywhere between $500 to $1,000 per dispensary a month.

Moreover, Dutchie charges customers a small fee whenever a customer makes an order.

Dutchie processes over $14 billion in cannabis sales annually. It's unknown whether the company earns a small percentage of the sales. However, the company may charge commissions for each order placement and completion.

Final Thoughts

Dutchie has yet to announce its plans to go public officially. The brother didn't rule out the possibility of an IPO, claiming they're always looking at opportunities to improve their business further.

The exact date is anyone's guess, but experts predict it'll happen sometime between 2023 to 2025.

As of March 2023, Dutchie's valuation sits at $3.75 billion. The company's annual revenue is $356 million, according to reports.

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The information in this article is well-researched and factual. Still, it contains opinions also, and IT IS NOT FINANCIAL ADVICE and should not be interpreted as such, do not make any financial decisions based on the information in this article; we are not financial advisors. We are journalists. You should always consult with a professional before making any investment decisions. We hold no stock or interests in any of the Companies discussed on this website/app.

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