Nine-figure funding rounds are back to start off 2023

BY CARA EISENPRESS

The deals got bigger in late January. After a fourth quarter where seed-stage funding dropped by 48% in total, according to a report from Primary Venture Partners, the first weeks of the new year saw substantial dollars invested in both new and later-stage firms. That includes the market-leading cannabis platform LeafLink and a big bet on improving clinical trials through automation and software.

LEAFLINK

FUNDING DETAILS $100 million

Series D

INVESTORS CPMG, L2 Ventures and Nosara Capital as well as existing investors

HEADQUARTERS Financial District

CO-FOUNDERS Ryan Smith (now executive chairman) and Zach Silverman (now senior adviser)

Wholesale cannabis platform closes $100 million round amid industry struggles

As the city’s legal retail cannabis industry takes off, a homegrown tech company is planting new seeds for growth. Seven-year-old LeafLink operates a platform for cannabis retailers to connect with brands and distributors and offers a product suite that includes payments, logistics and marketing services. LeafLink said it serves about 50% of the entire U.S. cannabis industry, processing around $5 billion in orders annually.

The new round of funding comes as the cannabis industry nationwide struggled with falling wholesale prices, due to an oversupply. LeafLink will receive the funding in two tranches, putting it toward new offerings on the platform and providing “a strong balance sheet that will enable continued innovation alongside our customers,” said Ryan G. Smith, co-founder and executive chairman. The company last raised $40 million in July 2021 at a valuation of $800 million.

The company made sweeping leadership changes at the same time, with both co-founders moving on to board or advisory positions. Smith, formerly CEO, became executive chairman on Feb. 1; at the same time co-founder and Chief Technology Officer Zach Silverman became senior adviser. The new CEO is Artie Minson, who joined LeafLink as president and chief operating officer in March 2022 after stints in the C-suite at WeWork, Time Warner Cable and AOL. Karan Gupta, formerly CTO at San Francisco-based Shift Technologies, joined LeafLink as the new CTO.

Sizable series A to simplify clinical trials

Paradigm seeks to speed up clinical trials and improve patient access to potential treatments. To do so, the company is building a single new product that can be used to

PARADIGM

FUNDING DETAILS $203 million

Series A

INVESTORS Arch Venture Partners of Chicago; General Catalyst of Cambridge, Massachusetts; American Cancer Society’s BrightEdge fund, which is based in Boston

HEADQUARTERS New York City, neighborhood unknown

CO-FOUNDERS Kent Thoelke, Milind Kamkolkar connect physicians and health care practices with trial sponsors so that all potential patients can be screened for eligibility, according to a news release on its site.

This is no small shot.

“The system is broken,” CEO Kent Thoelke said in a statement on Paradigm’s site, “and the human cost of inaction is unacceptable. Paradigm is reimagining the entire drug development paradigm by upending the status quo and focusing on equitable access to clinical research at scale from the start.”

Chicago-based Arch Venture

Partners had been incubating the company since 2021. Paradigm’s leadership hails from leading health and health-tech companies. Thoelke was formerly chief innovation officer at clinical trial company Icon, and Chief Operating Officer Milind Kamkolkar led digital, data and artificial-intelligence teams at Cellarity, Sanofi and Novartis, respectively. Kenneth Frazier, a former chief executive at the pharmaceutical giant Merck, is a member of the company’s board.

According to its website, Paradigm’s headquarters are in New York City, and there is another office in Columbus, Ohio. So far Paradigm has three job openings, all remote.

Social media help for more regulated industries

For companies in the automotive, pharmaceutical and finance industries, using social media to market their wares is not as simple as signing up for an Instagram account.

Constellation, which was named one of the 50 fastest-growing companies in 2022 by Crain’s, is a platform that allows businesses in these sectors to launch and manage digital advertising campaigns while following their sector’s particular set of regulations by applying industr y-specific disclaimers as needed. The investment of $15 million will go toward hiring employees who can support an influx of clients, such as Volkswagen Group and Jaguar Land Rover, and toward expanding into the pharmaceuticals industry.

In addition to New York, Constellation has offices in Dubai, Seoul and Toronto. ■

Constellation

FUNDING DETAILS $15 million

INVESTORS Newlight Partners of New York

HEADQUARTERS Financial District

CO-FOUNDERS Diana Lee, Nauman Hafiz, Matt Woodruff

Hawkins Way Capital and Värde Partners have purchased the property at 525 Lexington Ave. for about $153 million, according to property records and the companies. Ashkenazy Acquisition Corp. and Deka Immobilen had purchased the hotel for $270 million in 2015.

The 35-story property, built in the early 1920s, includes 655 rooms and spans about 400,000 square feet. It had operated as a Marriott hotel focused on business travel but closed early on in the pandemic. The buyers are ru- ott, claiming that the giant hotel chain had misappropriated $12 million in revenue.

The mortgage on the building went into default in February 2021, at which point Deka filed foreclosure proceedings. Deka had owned 85% of the hotel, while Ashkenazy had owned 15%.

Industry troubles

This is just the latest of several hotels to trade for a huge loss since the pandemic began. Two Kings Management bought the Holiday Inn at 125 W. 26th St. for about $80.3 million last year, much less than the roughly $111 million Watermark Lodging Trust had bought it for in 2013. And C-III Capital Partners bought the Lexington Hotel at 511 Lexington Ave. for about $175 million, compared with the roughly $335 million DiamondRock Hospitality bought it for in 2011.

mored to be considering turning it into student housing.

Representatives for Hawkins, Deka and Ashkenazy did not respond to requests for comment. A representative for Värde declined to comment.

The property has gone through several legal issues in recent years.

Deka and Ashkenazy had been trying to sell it since 2016, and Deka sued Ashkenazy in 2019, accusing its partner of backing out of a deal to buy the property for $174 million. After the pandemic hit, Deka and Ashkenazy both sued Marri-

This is not even the first Lexington Avenue hotel that Hawkins and Värde themselves have purchased at a steep discount since the onset of Covid. The firms also bought the DoubleTree by Hilton at 569 Lexington Ave. for $146 million, much lower than RLJ Lodging Trust’s 2010 purchase price of about $332 million.

A JLL team including Jeffrey Davis, Gilda Perez-Alvarado, Stephany Chen and Bob Knakal represented the seller in the 525 Lexington Ave. deal. JLL and the buyers both previously announced that the property had sold but did not disclose the price. ■