Hound Labs Secures $30 Million Series D Funding to Advance Commercialization of World’s First Marijuana and Alcohol Breathalyzer

On August 28, 2019, VCBeat (WeChat ID: vcbeat) learned that Hound Labs, the developer of the world’s first cannabis and alcohol breathalyzer, announced the completion of a $30 million Series D financing round. The round was led by Intrinsic Capital Partners, with participation from NFP Ventures, the investment arm of the largest insurance brokerage in the United States, Main Street Advisors, and existing investors Icon Ventures and Benchmark.

Following the completion of this funding round, Hound Labs will advance the commercial manufacturing and market supply of cannabis and alcohol breathalyzers.

Hound Labs is a breath technology company headquartered in Oakland, USA, that has developed ultra-sensitive technology for non-invasive breath measurements. Based on this breakthrough technology, Hound Labs’ cannabis breathalyzer is the world’s first device capable of rapidly, accurately, and cost-effectively measuring recent cannabis use and breath alcohol concentration. The Hound breathalyzer is intended solely for use in law enforcement, insurance, and employee management. Hound Labs was founded in 2014 by Dr. Mike Lynn, a venture capitalist.

Howard Goodwin, a partner at Intrinsic Capital Partners, stated, “The legalization of cannabis has disrupted every aspect of society, giving rise to a unique demand for tools that help employers and law enforcement agencies detect recent cannabis use. Hound Labs is currently the only solution capable of measuring recent cannabis consumption.”

The recently released results from Hound Labs’ second clinical trial of its breath-testing technology confirm that breath testing is a viable method for determining recent cannabis use. Dr. Kara Lynch, Associate Professor of Laboratory Medicine at the University of California, San Francisco (UCSF), participated in the study, and her paper detailing the findings was published in Clinical Chemistry.

Tetrahydrocannabinol (THC) can be detected within three hours after marijuana use. These findings are significant, as researchers have demonstrated that neurological impairment is most severe within the first three hours following marijuana consumption. Dr. Kara Lynch stated, “Based on published clinical study results, it is evident that Hound Labs is at the forefront of the marijuana testing market, and its pioneering technology will deliver substantial value to the industry.”

Mike Lynn, CEO and co-founder of Hound Labs, stated, “Given the widespread use of cannabis in both medical and recreational contexts, we are ushering in a more meaningful and equitable era of drug testing.”

In medicine, cannabis is frequently used as an adjunct therapy for certain advanced terminal illnesses (such as cancer and AIDS) to stimulate appetite and alleviate pain. It can also be employed to relieve neurological symptoms associated with glaucoma, epilepsy, and migraines, as well as to reduce nausea in patients undergoing chemotherapy.

Since 2014, 14.8 million Americans have driven a car within three hours of using marijuana, while the number of positive marijuana drug tests among the general U.S. workforce has increased by nearly 17%. Managers and law enforcement agencies need new tools to address evolving laws and attitudes toward the legal use of marijuana. Existing testing methods, such as blood, urine, and hair sampling, cannot determine when marijuana was used.

“Managers across China are seeking practical and effective solutions to ensure workplace safety,” said Shawn Ellis, Managing Director of NFP Ventures. “The cannabis and alcohol breathalyzer developed by Hound Labs can address these issues and benefit multiple industries, including trucking, construction, logistics, and retail.”

Benchmark is an early-stage venture capital firm that focuses on investing in startups in the fields of mobile, social, infrastructure, and enterprise software development. Founded in 1995, the company has offices in Woodside, USA, and San Francisco, California.

Icon Ventures is a specialized venture capital firm focused on Series B or C financing rounds, headquartered in Palo Alto, California, USA. Icon manages over $780 million in assets and collaborates with leading global venture capital firms to invest in pioneering startup companies.

Intrinsic Capital Partners is a private equity firm dedicated to investing in promising companies within the emerging legal cannabis industry. The company’s management team boasts many years of experience in investment, pharmaceuticals, and regulatory affairs. Intrinsic Capital Partners aims to help business owners create value and generate substantial returns for its fund investors.

Main Street Advisors (MSA) is an investment management platform with assets under management (AUM) exceeding $5 billion, providing investment management services to entrepreneurs, athletes, and entertainers. 

NFP Venture LLC (NFP Ventures) is a venture capital fund initiated by NFP, focusing on strategic cooperation and investment in emerging insurtech, fintech, and HR tech sectors. The company primarily provides investment to enterprises at the seed and Series B stages.

(Compiled by Tian Shuhang)