Trym Seed Stage

This is the Trym pitch deck to raise a $3.1m seed round in 2020.

About

Trym empowers cannabis cultivators to make informed decisions to improve operational efficiency, maintain consistency, grow revenues, and increase their competitive advantage.

Venture funding for cannabis-tech startups that do everything from helping grow better pot to connecting dispensaries with customers has been red-hot in recent weeks.

Trym is the latest cannabis tech startup to raise money, closing a $3.1 million seed round on September 29. The startup’s product helps cultivators optimize cannabis-grow operations as marijuana can be a finicky plant, Trym CEO and cofounder Matt Mayberry told Business Insider.

Trym did not disclose its post-money valuation.

The first $1 million of the round came from friends and family, Mayberry said. The rest of the seed funding, $2.1 million, came from a group of cannabis-focused venture funds led by 7thirty Capital and included Welcan Capital, Arcview Collective Fund, and Delta Emerald Ventures, among others.

It can be difficult for cannabis startups to raise money because marijuana is still an illegal drug in the eyes of the US federal government.

Raising money was “not a very expeditious process,” Mayberry said. His team first started raising funds at the end of 2019 — right as the cannabis industry got hit by a capital crunch and investors got leery of new deals.

From there, it was straight into the pandemic. “We were honestly concerned that we were going to get everything lined up,” Mayberry said.

There was a silver lining for Trym, though. As cannabis was declared an essential service in California, where Trym is based, investors started looking to the industry as a way to offset the losses they were feeling in other sectors, like software for travel companies or restaurants.

“Cannabis again became this really attractive investment opportunity,” Mayberry said, and they ended up oversubscribing the round despite the initial challenges with fundraising.

A limited pool of investors in cannabis

Still, the pool of investors that Trym could tap was small, Mayberry said, given that the startup serves the cannabis industry. Most large venture funds won’t invest in cannabis tech, even if the startups don’t actually grow or sell marijuana themselves, because their investors have clauses in their contracts that prevent them from investing in vice industries like gambling, tobacco, and increasingly cannabis.

Mayberry said many of his friends, entrepreneurs in the broader tech space, had a much easier time with the entire fundraising process than he did.

“So the minute you say that you are a cannabis company, even if you are a cannabis software company, you immediately limit the amount of venture funds that are potentially going to be interested in you,” Mayberry said.

In other words, the large circle of investors interested in funding a software startup becomes much, much smaller — and the pitch has to stand out, given that there are not many other places to turn for capital, Mayberry said.

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