DENVER — Wurk, a tech startup that went through the Canopy Boulder accelerator program in 2016 and designed a human-resources platform for the cannabis industry, has raised $3.2 million in a bridge-funding round.
Wurk started in 2015, after a friend of chief executive Keegan Peterson was dropped seven times by HR providers, because the friend’s business touched cannabis. Peterson, whose background is in HR tech, found that there was no service made specifically for the cannabis industry. Peterson created Wurk to fulfill needs like payment, employee on-boarding and time tracking. While the major HR tech companies partner with traditional banks, Wurk specifically partners with banks that work with cannabis clients. Wurk has since grown to operate in 27 different states serving thousands of employees for different cannabis businesses.
Now, the company has raised $6.5 million to date.The recent $3.2 million is from new and returning investors, including Poseidon Asset Management, who led the round, as well as Phyto Partners, Altitude Investment Partners, Arcview Investor Network and Arcadian Fund. Canopy, a cannabis venture fund and accelerator in Boulder, was one of the company’s first investors.
Peterson told Bizwest that the new round of funding will go to hiring new team members, expanding its reach in sales and service so the company can handle its flow of customer support calls to meet the demands of the industry. He added that the company makes its revenue from charging a subscription for its software-as-a-service solution.
While owning a building seems like something every successful business should do, that’s not always the case. For many companies, it makes more sense to continue leasing space, freeing up time and capital that can be better utilized in other ways.
Looking ahead, as cannabis businesses become more widely accepted and more traditional companies start entering the space, Peterson said he believes Wurk’s experience in the field will set it apart from competitors.
“I believe the industry will legalize the way alcohol did, with each state having different rules and regulations that govern it,” he said. “Part of what we do is understand state-by-state the cannabis regulations and help customers comply with them.”
He said that any HR payroll competitors enter the business are likely having one-size-fits-all solutions, while Wurk was started to be custom-suited to the cannabis business.
“It’s up to the cannabis industry to decide if it needs something tailored to their needs or something generic and basic,” he said. “I think that’s where we continue to control our own destiny and provide a value greater than our competitors.”