Headset, an analytics startup for the nascent marijuana industry, closed a $12.1 million Series A funding round backed by prominent investors.
The round was led by Poseidon Asset Management, an early Juul investor that's raising a $75 million venture fund to go after marijuana startups, and included middle-market private-equity fund AFI Capital Partners and Canopy Rivers, the venture arm of the publicly traded marijuana cultivator Canopy Growth.
The investment is Canopy's first direct investment in a US company.
"We're getting a lot of interest right now from consumer-packaged-goods industry companies like beverage/alcohol, tobacco, pharma, and even financial services who are all interested in the cannabis industry," Headset CEO Cy Scott told Business Insider in an interview.
Headset is imbued with cannabis-industry DNA: Scott, Brian Wansolich, and Scott Vickers founded Headset in 2015 after selling Leafly, a cannabis media platform, in 2011 to marijuana investment firm Privateer Holdings.
"We honestly can't think of a team who's better positioned to understand the history of this modern cannabis industry and where it needs to go to get it to that next stage," Emily Paxhia, a founding partner at Poseidon, told Business Insider.
Paxhia added that Scott, Wansolich, and Vickers have a "critical vantage point" to understand what types of data are most useful to the cannabis industry that and they have a successful track record of scaling and selling startups.
Read more: Marijuana M&A is already hot in 2019, with a pot tech-vape tie-up worth $210 million
Headset, which is headquartered in Seattle, partners with marijuana shops throughout the US and Canada — where marijuana is legal — to provide market intelligence for retail sales.
Scott said the inbound interest from outside the marijuana industry is a "pretty recent phenomenon."
"I think in the last year we really saw this sea change happening where, before, our client base was strictly cannabis operators, but now we're expanding into more traditional companies," Scott said. "They have a real need for our data as they're looking at opportunities and risks that the cannabis industry will bring."
Scott said Headset plans to use the money to bolster its presence in Toronto, where it opened a new office last year, and to double its team by next year.
"We're really interested in investing in a market like Canada because marijuana's legal nationwide," Scott said. "It really just opens up a lot of opportunity."
To Scott, data is a crucial element of the cannabis industry.
"A lot of brands are vying to be the Johnnie Walker or the Smirnoff of marijuana that's going to be around for years to come," Scott said. "But to be able to do that, you need to be able to differentiate yourself. Data helps you do that."
- Read more:
- One of the largest publicly traded marijuana companies says the Farm Bill provides a 'pathway' for entering the lucrative US market
- Old-school accounting firms are finding the emerging marijuana industry to be an unexpected goldmine — and a minefield
- A cannabis CEO who led turnarounds at FAO Schwarz and Patagonia explains why he's looking to poach 'nimble' people from small companies — rather than big-name execs
- An early investor in Juul is raising $75 million to make venture investments in pot companies
