French cannabis tech startup Rainbow raises €2 million to boost its hemp-based brand

French CBD startup Rainbow, which aims to be the leading hemp-based brand portfolio in Europe, has raised €2 million in their recent round of funding. Last year we interviewed Ludovic Rachou, co-founder, who also secured a €1 million round in June 2020.

Founded by 5 entrepreneurs in November 2019, Rainbow has been experiencing exponential growth amidst the booming CBD category. To date, two CBD-based brands have been launched by Rainbow: Kaya (food products, mainly food supplements) and Peace and Skin (cosmetics). The brands were created with one clear mission: to be an on-the-go offering that helps consumers de-stress and find a moment to relax. Unlike many others in the category, Kaya and Peace and Skin also use natural adaptogenic plants along with CBD in the products, which help to alleviate stress and its harmful effects.

The recent wave of funding, which has been raised from both new and existing investors including Senseii Ventures (VC fund) and Artemis Growth (US Cannabis Fund), will help to fuel Rainbow’s brand mission as they expand into wider European markets – most recently Italy, Germany and Poland.

The Paris-based company, that also has headquarters in London and Berlin, celebrates over 15,000 customers since September 2020 and record sales which are expected to be close to 5 million by the end of the year. The company also announced listings at major retailers across France and the UK with about 1000 shops in total.

Ludovic Rachou, Co-Founder of Rainbow, and founding member of the ACI (Association for the Cannabinoid Industry, leading trade association in the UK) comments: “At Rainbow, we’re committed to delivering quality products with the potential to have a real impact on consumers’ day-to-day and this latest wave of funding puts us one step closer to achieving this goal. The CBD category has been growing hugely over previous years, and we aspire to be the go-to CBD brand for consumers across Europe – providing a truly great product that shoppers can trust. Our brands were born from the needs of myself and my co-founders, who are all living busy, stressful lives like millions of others, and we hope that they can be an ally to many more!”

This fundraising will allow Rainbow to expand internationally. With products already marketed in a dozen countries, Rainbow is preparing to increase its workforce from 35 to 50 employees by the end of 2021. This financing will also allow the launch of new brands and product ranges based on CBD made in France, a first on the market since CBD had to be imported until the upcoming French regulatory changes.

The Kaya range spans ten bespoke adaptogenic and CBD-based products to cater to a variety of consumer needs, from restful sleep to everyday stress relief. All products are vegan-friendly and have been available for purchase in France and in the UK since January 2020.

Kaya is also one of the first UK brands to have their application for Novel Foods certification verified by the Food Standards Agency and European Food Standards Agency for their CBD-based products. The application to the FSA (UK application number: REFRP427) has been verified as of March 2021. Whilst other brands are relying on their 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.

The Peace and Skin cosmetics are certified organic and combine CBD with adaptogenic plants. The range includes four cosmetic products that act as a ritual in four steps to fight against the consequences of stress on the skin.