Cannabis sales eclipsed $17B in 2020, setting a new record for annual sales and the economic impact of the marijuana industry is expected to surpass $92B in 2021. CAGR for annual sales is estimated to be at least 20%+ by most estimated until 2030 with more and more jurisdictions, including New York, moving towards legalization. Sophisticated specialized services to cater to the needs of cannabis brands and businesses are emerging to address this nascent but ballooning market. Surfside is an end-to-end customer acquisition platform built specifically to address the needs of the cannabis industry. The company prioritizes the collection, use, and synthesis of first-party data to power its customer data platform and layers that data with its demand-side platform to power tailored campaigns across all devices. As a result of regulatory restrictions, cannabis businesses are not able to effectively leverage conventional advertising means and Surfside provides a packaged, unifying, and compliant solution to build and scale demand generation. The company now has over 1,000 dispensaries and over 100 brands using the platform.
AlleyWatch caught up with Cofounder Jon Lowen to learn more about the inspiration for the business, the company’s strategic plans, recent round of funding, and much, much more.
Who were your investors and how much did you raise?
Seed round from Casa Verde Capital, $4M.
Tell us about the product or service that Surfside offers.
Surfside provides an end-to-end marketing platform that allows advertisers to onboard their 1st party data to seamlessly build custom audiences for easy marketing activation across desktop, mobile, tablet and other connected devices. We are focused on helping cannabis brands, dispensaries, and other businesses execute media campaigns that are personalized based on the actions that are happening in their stores or on their websites, to improve customer acquisition through paid media and measuring everything back to in-store and online sales.
What inspired the start of Surfside?
Over the last 10 years we saw the over usage of pre-built 3rd party data segments and underutilization of data that companies had on their customers. We wanted to help businesses turn their existing customer data into an asset for sales growth, by enabling them to better understand what type of customers are purchasing their products and how to replicate that purchase process through a combination of better measurement and media targeting.
How is Surfside different?
We are the only platform in AdTech that has built an end-to-end solution that combines a customer data platform with a demand-side platform, natively built together. This allows us to underpin our data onboarding with actionable marketing IDs that allow us to turn insights and previously static data, into media campaigns that are measured back to in-store and online sales.
What market does Surfside target and how big is it?
We target the cannabis market, the digital media market, and the customer data market – the combined TAM is over $700B globally
What’s your business model?
We provide a combination of managed service offerings and licenses to our platform and data. Giving clients the ability to take advantage of different components of our technology or use our team of experts as an extension of their marketing or data insights team.
How has COVID-19 impacted the business??
In the cannabis industry, many states declared dispensaries as essential businesses and there was a big digital shift in the industry to e-commerce as people shifted to delivery and curbside pickup. This accelerated the cannabis industry about 2-years in the span of 2-months. Brands and retailers became a lot more focused on communicating directly with customers ahead of their store visit, to be able to drive and influence purchase decisions through advertising, not relying as much on in-store staff to customer education.
What was the funding process like?
As a business we have been so focused on growth and servicing our own clients, we had to readjust our mindset a bit to delegate the necessary time needed to ensure we properly sold Surfside to investors. It was a great experience to get firsthand feedback on some of the strengths and weaknesses in the business and then optimize our processes and fundamentals to better position ourselves for growth and success.
What are the biggest challenges that you faced while raising capital?
When we started Surfside we raised very little from friends and family, more so as a security blanket, but have been profitable since day 1. The goal was to grow as aggressively as possible while remaining fiscally responsible to our clients, employees, and investors. Since we had been operating pretty lean and mean, time was not a luxury we had. So, our biggest challenge was definitely juggling the growth of the business in conjunction with the capital raise and necessary diligence to vet and close opportunities that arose.
What factors about your business led your investors to write the check?
Marketing and data are such a pain point for businesses in the cannabis industry and Surfside is the only technology that was built to solve both of these complexities. Most of the other platforms that are focused in this vertical, do not actually build out the entire tech stack which puts Surfside at a massive advantage when it comes to performance and capabilities. That combined with our track records at other public and private companies with successful exits and great reviews by our clients and some of their portfolio companies, went a long way
What are the milestones you plan to achieve in the next six months?
The focus for the next six months is around hiring and product releases. We are looking to more than double our staff in the next 6-months and have a very aggressive set of goals as we look to release a number of features and capabilities that we have built into our software. A lot of this is centered around providing our customers more service and transparency on who their customers are and how their media campaigns are converting to drive online and in-store sales.
The focus for the next six months is around hiring and product releases. We are looking to more than double our staff in the next 6-months and have a very aggressive set of goals as we look to release a number of features and capabilities that we have built into our software. A lot of this is centered around providing our customers more service and transparency on who their customers are and how their media campaigns are converting to drive online and in-store sales.
What advice can you offer companies in New York that do not have a fresh injection of capital in the bank?
There is always another company that raised a lot more money with a lot less revenue or tech. As long as you focus on the product and prove out the value with real customers, the rest should take care of itself.
Where do you see the company going now over the near term?
We are going to continue our expansion across the US and expand into Canada, making sure we have an active presence in all relevant markets.
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Il Buco Alimentari never disappoints.
