UK-based CBD brand Kaya has successfully raised £1.7m of funding which will help fuel its expansion into European markets.
Founded in 2019 in France, CBD and adaptogenic brand Kaya had a vision to be a European leader in the CBD sector. The company was one of the first in the UK to receive approval under the new Novel Foods certification, verified by the Food Standards Agency for their CBD-based products, and today, its products are sold in over 1000 stores across Europe.
Kaya’s recent £1.7m fundraise came from both new and existing investors including VC fund, Senseii Ventures, and US cannabis fund, Artemis Growth. The funding will go towards fuelling the company’s brand mission as they expand into European markets following its recent launches in Italy, Germany and Poland.
“We’re currently the biggest player in France when it comes to finished products with CBD and we have about 40 people in the company in France. We have a few people in the UK as well,” said Ludovic Rachou, Kaya co-founder and founding member of the Association for the Cannabinoid Industry (ACI), a cannabis trade association in the UK.
Kaya’s range spans ten bespoke adaptogenic and CBD-based, vegan-friendly products for a number of uses from restful sleep to everyday stress relief.
“It was the first market because of the regulation in the UK with Novel Foods so, it has been hard to grow in the UK recently. We launched Germany with an edibles brand, and launched a cosmetics brand called Skin back in November 2020. So, we mostly sell in France in pharmacies and general retails, and also small independent shops and online. So, we don’t have the same kind of health retail that we have in the UK or in the US.
“About half of our revenue is our own revenues online, and we are going to finish our first year with somewhere between €5 to to 6m in revenue.”
Rachou highlights that, whilst other brands are relying on ingredient suppliers or manufacturers to achieve compliance, Kaya is one of the few brands to have submitted its application in its own name, processed through the EIHA Projects Consortium.
“It is a process where we have to prove that the CBD we use – we currently only use isolates in our products – is actually safe for human consumption, and it is something that we had to do in the UK, but we also have to do for French markets for instance. There are quite a few brands that claim the same thing, but the main difference with us is that we actually formulate all our products in-house.
“We have five different founders and my co-founder Allison is a pharmacist who is actually the one doing all the formulations. So, we don’t buy, because on the market you mostly see brands which products are from on-the-shelf labs – however, we usually outsource production, but we work on the formulations and the recipes ourselves.
“I think that’s one of the biggest differences, and we buy for different regions from different suppliers. We never buy anything at the same place.
“When we launched the company we raised €1m with mostly French and British private investors – high net worth individuals and mostly entrepreneurs. Then, for the second round, it was mostly the same people, and a new, interesting new player from the US, a fund called Artemis Growth, which is interesting because they are one of the biggest funds in the US space.”
Kaya is beginning to look towards the European CBD market for its future and will be launching a new Series A round aiming to raise between €5 to 10m.
“I think we have seen the market in the US maybe losing faith a bit because of all the regulation – it is not so clear with the FDA, so, many Americans are starting to look at what is happening in Europe. For us, when you see the investments that Artemis Growth has made in the US – so far they have made the right choices – so, we are quite proud to have them on board.
“We are funding our international expansion – so, we just launched in Germany and Italy, and we are also willing to expand all around in Europe. We want to trial all the markets and, if the figures are good, then we will launch specific teams on the ground. We think it is very important to have natives in each and every country – to understand the market and the consumer.”
One year ago Kaya had six people in the company, but has now evolved with a team made up of 40 people, and soon to be 55, and has plans to launch new product lines.
“We are going to launch a pet food brand, hopefully, by the end of the year or early 2022. Most of the CBD you get in Europe is either imported from the US, or sometimes from Eastern Europe, but we are about to launch in mid-2022 with French hemp and CBD. France is actually the biggest hemp farmer in Europe and there is a new regulation that is about to change next year. So, we’re going to be allowed to do French CBD which I think is pretty important to sell. Our goal, in the end, is to sell German CBD in Germany and French CBD in France, and so on.
“We are always looking for talent so we are currently recruiting a lot of people and we are always interested in talent everywhere in Europe. So if anyone wants to get in touch – feel free.”
Kaya, which also has headquarters in Paris, has seen more than 15,000 customers since September 2020, and Rachou says the latest round of funding puts Kaya one step closer to achieving the goal of delivering quality products with the potential to have a real impact on consumers’ day-to-day lives.