This Cannabis Tech Company Is Ready To Solve The Industry’s Supply Chain Challenges – New Cannabis Ventures
Exclusive Interview with Backbone Founder and CEO, Rajesh Chandran
Cannabis operators have struggled with a lack of visibility into their supply chain, according to Backbone founder and CEO Rajesh Chandran. Backbone was launched with the goal of unifying this data and enabling cannabis businesses to operate efficiently. Chandran sat down with New Cannabis Ventures to talk about how Backbone serves its customers and how the business will continue to grow.
Listen to the full interview or read the summary below:
Create a backbone
Chandran has a background in machine learning. He first entered the cannabis space as an investor about six years ago. He and a small group of friends set up a small fund to invest in the emerging cannabis market, but it became apparent that visibility into cannabis operations was difficult. Chandran, embracing his love of data, pivoted to find a solution.
Backbone is led by a team made up of a wide range of talent from the tech and cannabis worlds. The company’s CTO, Vic Patil, joins the team with Intuit experience. The team also has leaders, like COO Peter Huson, PhD, with experience in the cannabis industry.
Backbone offers software solutions and IoT devices that help its customers identify bottlenecks in the supply chain and improve operations. Customers can use Backbone to gain visibility into their supply chain in every state where they operate across biomass, mining, manufacturing, and retail. Armed with this information, Backbone customers can determine the profitability of products.
Backbone is an ever-evolving platform, according to Chandran. The company’s ultimate goal is to create sticky features that users will want to adopt. He put the basic framework in place, and now he listens to his customers to solidify the platform based on their feedback.
The company currently operates in five countries, including the United States, Canada, Portugal, United Kingdom and Israel. In the United States, its footprint spans 15 states. As more states adopt cannabis legal frameworks, Backbone will be poised to offer its solutions. The company views each new state and its unique regulations as an opportunity to refine its platform.
Backbone’s customers include contractors, brands and multi-state carriers. The company has created an ecosystem that enables high-yield operators to understand their supply chain across their footprint and scale as they enter new markets. TerrAscend and Cookies are among the company’s customers.
About 40% of Backbone’s client base comes from referrals, according to Chandran. Beyond that, the company acquires customers via outreach. So far, he hasn’t done much marketing. The team shows prospects what they can achieve with Backbone in days. Even the most complex sales close within 30 to 60 days, according to Chandran.
Boot-to-sell legacy systems are Backbone’s biggest competitor, but the company tends to play well with other tech companies, according to Chandran. Often, the company takes the opportunity to integrate and collaborate.
As a repeat entrepreneur, Chandran learned to plan ahead. Backbone is open to the possibility of mergers and acquisitions, whether acquisition or acquisition. The company’s long-term goal is to create a stable business with decades ahead of it.
Investors and funding
In April, Backbone announced that it had raised $14 million in funding. Over the five years of the company’s existence, it has sought to show investors that cannabis is a valid market, according to Chandran. It has a mix of Silicon Valley angel investors, pure SaaS investors, and cannabis tech investors. Chandran expects to see more traditional venture capitalists, private equity firms and large family offices recognize the opportunities in cannabis as the industry moves forward.
The next wave of investors in Backbone will be those with an eye for the long term. Chandran anticipates that these investors will understand the value of the cannabis space and its implications for the global supply chain.
Backbone triples its revenue from last year, according to Chandran. The challenge for the company is not to stimulate growth but rather to manage the wave of demand. As Backbone grows, Chandran wants to make sure the company’s customer-focused culture isn’t lost.
As the business scales, the team carefully tracks user engagement. They want to know that customers are using the software and finding value in it. Backbone has internal metrics to track the value it brings to customers in terms of time and money saved. In addition to growth as a business, Chandran also wants to find opportunities to reverse the damage caused by the War on Drugs. He sees social equity as an important part of doing business as a profitable enterprise.
To learn more, visit the Backbone website. Listen to the full interview: