Behind California's lucrative marijuana businesses are the software companies keeping the books straight.
SaaS startups like Newport Beach-based Blaze run the iPads customers use to buy legal cannabis at stores in Venice as well as the delivery apps that help bring products straight to their doors.
And as more states pass marijuana legalization, delivery services, dispensaries and the companies that serve them are bracing for a new wave of business.
This week, the venture-backed company closed a $8 million Series A round, and plans to expand across the Midwest and East Coast.
The four-year-old company sells software and apps to over 300 legal cannabis companies in nine states, including California.
Delivery services such as L.A.-based Heyemjay have integrated the startup's API into their apps for drivers to facilitate drop-offs. The software handles compliance and logistics in each state, where strict, differing delivery requirements can slow down operations for small businesses.
Blaze's customers also include marijuana dispensaries, wholesalers and cultivators who pay a monthly or annual fee for the software.
"We track inventory. We track all their transactions, whether it be sales or invoicing and purchase orders," said co-founder and CEO Chris Violas, who raised a $1.5 million seed round in 2019.
The former Amazon Web Services account manager threw himself into studying the cannabis market during college, where he studied business and played Division 1 soccer until a series of injuries.
"In 2010, there was no legitimate delivery service that could bring cannabis to your doorfront in a proper way," said Violas.
He launched a small delivery service a year later — back when marijuana was legal for medical use only — and built Blaze as his senior thesis.
Violas thinks the cannabis retail tech industry has "reached a tipping point," with a handful of startups continuing to close splashy venture deals. New York-based LeafLogix — which Violas calls his biggest competitor — was acquired this month by cannabis ordering platform dutchie during a $200 million round that valued the Oregon-based company at $1.7 billion.
Blaze's boost in funding will help the 30-person team build out its tech products and expand into new states. The round was led by Delta Emerald Ventures with participation from Act One Ventures and SOJE Capital.
"We've got a big goal here," Violas said. "We want to bring canni-tech up to where the rest of the world is at with technology."
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ServiceTitan is decidedly uncool and unglamorous, making all-in-one software for residential and commercial HVAC, plumbing, electrical and tradesmen. But that model has made it one of Southern California's most valuable startups.
The Glendale-based company announced Friday it has raised a half billion dollars at a $8.3 billion valuation. The round was led by Tiger Global Management and Sequoia Capital Global Equities with participation from H.I.G. Growth Partners. Existing investors participated, including Arena Holdings, Battery Ventures, Bessemer Venture Partners, Dragoneer Investment Group, Durable Capital Partners LP, ICONIQ Growth and Index Ventures.
ServiceTitan also announced that it has surpassed $250 million in annual recurring revenue, achieving 50% growth over the past 12 months.
Ara Mahdessian, co-founder and CEO of ServiceTitan, who immigrated with his family to the U.S. as a young boy from Iran, attributes the company's success to its singular focus on customers.
"We will do anything it takes to make one of our customers or contractors successful," Mahdessian told dot.LA co-founder Spencer Rascoff. "If we mess something up, we will go to the end of the world to fix it, even if it cost us an arm and a leg.... it's the right thing to do. And it's always worked out for us financially as well."
Mahdessian and co-founder and President Vahe Kuzoyan founded ServiceTitan in 2012 as a way to make their fathers' lives easier. They both worked as tradesmen.
Most of ServiceTitan's financing has come from Silicon Valley, but Santa Monica-based Mucker Capital got in on the company's 2015 Series-A financing at a $100 million post-money valuation.
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College was not Chris Webb's thing, so at 18 he took an internship at Oppenheimer and launched his career in finance.
While working Wall Street at investment bank Bear Stearns and then Lehman Brothers, he continually found himself drawn to the tech sector.
Eventually, the New York high life was getting him down, and Chris returned home to Los Angeles where his mom had invested in a restaurant that's now a successful chain, Tender Greens.
Chris learned about the pain points the restaurant was experiencing. Inspired, he combined his knowledge of tech to help restaurants avoid the onerous fees required of services offered by the likes of GrubHub.
Chris and his co-founder, Eric Jaffe, built ChowNow, an app and online ordering system for restaurants, in 2011.
Now, the L.A.-based company has 450 employees with investments from Upfront and 3L. Incidentally, I'm a limited partner in both those funds, so that makes me an investor in ChowNow.
Chris Webb is the co-founder and CEO of ChowNow. Previously, he had a career on Wall Street at investment bank Bear Stearns and Lehman Brothers.
dot.LA Sr. Podcast Producer & Editor Laurel Moglen contributed to this post.
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