- Trip raised $5 million in a funding round whose investors including Depop CEO Maria Raga.
- The company believes it’s the most raised by a UK CBD company in a single funding round.
- Its cofounder predicted the US would federally legalize CBD in “the next several years.”
- See more stories on Insider’s business page.
A London-based CBD-drinks company on Monday announced its first public fundraising of 3.5 million pounds, or about $5 million, to help fund its expansion into the United States and further across Europe.
Trip, which produces drinks and oils with cannabidiol, or CBD, the nonpsychoactive element of cannabis, told Insider it believed it was the largest single fundraising for a UK CBD company.
Trip’s backers include Maria Raga, the CEO of the secondhand-fashion app Depop, and the venture capitalist Christian Angermayer.
The news follows a slew of funding-round announcements for European CBD companies this year.
In February, South West Brands, a consumer CBD company, announced a 1 million-pound raise. Sanity Group, the German startup that owns the Vaay CBD brand, announced a raise of 5 million euros, or about $6 million, in March.
Olivia Ferdi set up Trip with her husband, Daniel Khoury, in 2018. In 2019, they launched their drinks range, which is now stocked in more than 2,000 stores.
Ferdi said the product placement in high-end department stores like Selfridges, Harvey Nichols, and Liberty London was crucial for assuaging people’s concerns about CBD products.
The CBD market “didn’t exist until a couple of years ago,” Ferdi told Insider.
“There was a lot of apprehension and confusion around what it would do and how you would take it, but at least with a drink it’s pretty straightforward,” Ferdi said, adding that that’s “why we can bring so many more people into it.”
Ferdi added that “the UK and European market in particular has accelerated beyond anyone’s expectations.”
Trip also announced on Monday that it had been appointed the sole CBD-product provider of Soho House, the global members-club chain, which would stock the products in its US outlets.
Trip has hired three more full-time staff members since January, taking it to six, and it plans to hire more with its US expansion, Ferdi said.
Ferdi declined to share specific revenue numbers but said Trip’s sales had increased by 400% in the first month of the pandemic with double-digit growth every month since.
Sales to consumers make up 30% and 40% of UK revenue, Ferdi said. She added that she expected this to decrease as stores and gyms where Trip is stocked reopen.
Ferdi also said the CBD industry had benefited during the COVID-19 pandemic.
“We were all switched into this upside-down environment where we’re working from home, have the macro uncertainty of what’s going on and concerns about the health of loved ones,” Ferdi said, adding that “the use case for CBD to support everyday kind of stresses increased.”
“We’ve been driven to the point where it’s like, ‘Yeah, I’m open to trying something,'” Ferdi said. She added that Trip had been lucky to position itself as part of a conversation about well-being.
Raga said she invested because “Gen Z’s attitudes to lifestyle and well-being” were becoming more important and Trip was “positioned to continue to drive connection in this space.”
Ferdi said increasingly clear regulation for testing and marketing CBD in Europe and the UK had created a “really positive outcome” for companies that can attract investment by showing they “really lean into the compliance.”
In the United States, certain CBD products are legal in several states, but federally the situation is more challenging.
Trip’s drinks are available via Deliveroo, the delivery app popular in Europe, at 15 sites across the UK. But the uncertainty in the US means you won’t find ads for the product on Facebook, Instagram, or Amazon.
“These companies are owned at their parent level by American shareholders, where the federal policy restricts CBD,” Ferdi said.
“The launch of a product and the ability to foster awareness and a community is hyper challenging. Your hands are essentially tied behind your back, so you can’t get out there in the normal way.”
Ferdi said the company had fans of its products in the US who could post on social media and spread the word.
Ferdi said New York’s legalization of cannabis this year was “quite significant.” She said her “best guess” was that CBD would be legalized on a federal level “in the next several years.”
She added: “When the US achieve federal legalization, that will have a significant impact on the global legal landscape.”