STORY HIGHLIGHTS
Spendr has raised $2.7 million for its cannabis payment and rewards app.
Spendr’s app is accepted at over half of Ohio’s dispensaries.
CEO Lucas Gould expects significant revenue growth in 2025.
A Cincinnati fintech that specializes in cannabis payments has raised millions of dollars in fresh capital as it looks to expand in a major way in 2025.
Spendr, billed as the first app to blend payments and rewards in the recreational and medical marijuana space, raised more than $2.7 million, according to a February Securities and Exchange Commission filing.
Founder and CEO Lucas Gould told me the funds largely came from existing individual investors. Spendr plans to follow with a Series A later this year; the recent raise is a bridge as it looks to accelerate its growth.
Spendr’s payments platform works much in the same way as Starbucks, Venmo or PayPal. Consumers load money onto the Spendr “wallet,” then use said wallet to buy products from dispensary partners.
Gould said the company has now passed $1 million in annualized revenue, and he expects that number to grow two to three times that – conservatively – this year. Spendr recently landed its first large enterprise client – the Cannabis Co., which has a multistate footprint – while its app is accepted at more than half of the marijuana dispensaries in Ohio, with further adoption in states like Michigan, California, Arizona, New York and Maryland.
The 2024 start of adult recreation sales in the Buckeye State, following the November 2023 approval of Issue 2, has also provided a business boost.
“We have a such a big opportunity, and we’re starting to move very quickly. We’re expecting this year to be our biggest yet,” Gould told me. “The (cannabis) market was projected to hit $40 billion in the U.S. in 2024, and some people say it can go as high as $100 billion by 2030. Nobody has won that market in terms of payments. It’s still dominated by cash. And so far, we’ve proven our ability to acquire a large part of a market like Ohio, which I think is going to be in the top five in the country.”
Spendr first launched in 2021. Gould, a Cincinnati native, quit his job at JPMorgan Chase to build out the company. He said he wanted to replicate the so-called “Starbucks app experience” in the marijuana space by offering customers rewards, much like the coffee giant.
Users can download the app for free and link their bank accounts. Inside, they can track their favorite products, locate Spendr merchants and load their ID and/or medical card for faster checkouts.
Dispensaries win, too, he said.
Spendr offers them another means to accept cashless payments – credit cards aren’t accepted since cannabis is still illegal at the federal level.
“It makes it feel more normal and less like a sketchy, back-alley transaction,” he said.
But more so, it’s viewed as a customer retention tool, Gould said. Spendr sends personalized, automated offers – via the app or by email – driving customers back to the store. Spendr users typically spend more per month and are more likely to return to a dispensary that offers Spendr payments and rewards, he said.
Spendr currently has 100 stores on the platform and counting, while nearly 100,000 users have downloaded the app, he said.
And those users stay engaged, Gould added, which is often a problem in the software space.
“It’s more efficient, and it’s faster and safer and people enjoy it, but deep down, what the owner cares about is, am I going to make more money from this?” he said. “That’s what we’ve been able to prove.”
Its now-largest client, the Cannabis Co., formerly known as Columbia Care, has a 12-state footprint. Spendr hopes other large enterprise clients will follow.
It’s also signed a handful of point-of-sale partnerships, deals that allow Spendr to integrate directly into a dispensary’s existing software system. In theory, that could make the payments process even faster and more efficient.
Both moves mean the company is poised for exponential growth, Gould said, especially as it adds more partners in bulk.
“For the first time, we’ve had all these dominoes falling,” Gould said. “We’ve been very manual, high-touch, one-at-a-time, but now it’s how do we find these big pockets of dispensaries. There’s a lot of momentum that’s been created from our early success.”
Currently, the downtown-based startup is a core team of 13, including some contract workers. Gould hopes to grow that count to 20 by the end of the year. The company is looking to add sales, engineering and customer success roles, he said.
He’s unsure if Spendr will take more traditional venture capital as it looks to raise again in short order. The company has yet to accept any institutional investments.
He said he’s looking for more strategic partners as the company grows.
“We’re seeing really meaningful adoption,” he said. “Right now, the plan for capital – and the plan for future capital – is just doing this at a bigger scale, until we’ve expanded across the country. And at that point, this is a really big company.”
H/T: www.bizjournals.com
