Choco, a Berlin-based food supply chain management platform, announced that it has secured $112M in a Series B extension round at a valuation of $1.2B led by G Squared and Insight Partners.
Existing investors, include Bessemer Venture Partners, Insight Partners, Coatue, Target Global, Atlantic Labs, Greyhound Capital, Leftlane Capital, MPGI, Visionaries Club, Discovery Ventures, and Christian Edler and Kevin Worner, joined.
The announcement comes nine months after raising $100M in Series B round led by Left Lane Capital and Insight Partners. To date, Choco has raised a total funding of $274M.
How will the funding be used?
The funds will enable Choco to digitalise the global food wholesale market completely by 2026. Further, the company plans to use the funds to increase its headcount from 400 to 700 by this year and launch in new markets, including Portugal.
Currently, the company is active in the US, Germany, France, Spain, Austria, and Belgium. Choco is the second German unicorn in April followed by Grover, which raised $330M last week,
What problem does Choco solve?
The food service industry, which has been traditionally slow to adopt new technology, and largely still runs on paper, was forced to make a sharp pivot to operate successfully during the COVID-19 pandemic.
Consequently, the German company is helping the foodservice industry by enabling a major shift towards digitisation.
Choco’s co-founder and CEO Daniel Khachab, says, “The main problem with the food industry is that there are a variety of actors along the supply chain, starting with the grower or farmer and ending with the restaurant — and a number of transactions are taking place. But nearly everything is happening offline via fax, pen and paper, and voicemails.”
Daniel Khachab, Julian Hammer, and Rogerio da Silva Yokomizo founded Choco in 2018 with a vision to make the food supply chain more transparent and sustainable to help increase margins in the food service sector.
Food waste is the third-largest driver of climate change and the single largest reason for deforestation.
The company works with food industry leaders, suppliers, distributors, and restaurants to help digitise the food supply chain and enable more efficient food procurement processes and business growth.
Choco’s core product is a digital ordering workflow and communication tool for restaurants and suppliers to facilitate food procurement
The platform connects restaurants, producers, and suppliers, enabling them to save time, money, and food in the purchasing process.
Khachab says, “Wholesalers want to prepare for the digital age and need intuitive software for ordering, finance, and logistics that will enable them to remain competitive over the next 5 years. This demand is evidenced by the traction Choco’s software and services have received with their ability to increase profit margins and supply chain visibility through those vectors.”
Based out of Chicago, G Squared is a growth stage venture capital firm that invests privately in today’s most dynamic companies. So far, the company has invested in household names such as 23andMe, Coursera, Instacart, Lyft, Pinterest, Spotify, and much more.
G Squared’s Larry Aschebrook says, “Choco has achieved incredible growth over the past year. We believe restaurants and the foodservice industry alike will need to adopt digital tools in order to be competitive in the long run. Choco is building a powerful ecosystem that will help to move the industry into the 21st century. We believe Choco can be the backbone of food service in the years to come. Their software already shows impressive levels of user engagement and true value creation for customers.”