Choco, a company aimed at building a more sustainable food system for restaurants and suppliers, brought in another big raise — this time $111 million in what it’s calling a Series B2 round — to boost its valuation to $1.2 billion.
The new investment, an internal round led by G Squared alongside Insight Partners, comes just six months after Berlin-based Choco took in $100 million in a Series B round, led by Left Lane Capital, to give the company a post-market valuation of $600 million.
If you’ve been keeping up with us, we’ve covered a number of Choco’s funding rounds over the years, including a $63.7 million Series A that was raised at two different periods, a $33.5 million round in 2019 and a $30.2 million round in 2020 — at a $230 million valuation — to bring total funding to $282.5 million since the company was founded in 2018.
The company is going after a $6 trillion food service industry that traditionally does business via spreadsheets or pen and paper. It developed software that digitizes ordering, supply chain and communications for suppliers and restaurants to give back some of that time.
“We have been lucky with our growth and lucky in a very large space where we can grow fast without much blocking us,” Choco CEO Daniel Khachab told TC. “When our investors offered additional funds, we said, ‘let’s go for it’ to be able to speed up, invest in our product, customer service and training of the team.”
Choco also collects data in real time so that suppliers can more accurately balance supply and demand so less food is wasted before it reaches the consumer. Its aim is to “completely digitize the food wholesale market across the globe by 2026 on behalf of zero food waste.”
The company is not alone in going after food waste. For example, grocery app Flashfood raised $12.3 million to tackle retail food waste, and Full Harvest raised $23 million to find endpoints for imperfect produce.
Meanwhile, Choco is active in the U.S., Germany, France, Spain, Austria and Belgium, and experienced 350% growth in users over the past year. And as of February, the total value of goods traded through Choco exceeded $1.2 billion, and it is working with around 15,000 restaurant customers and 16,000 on the supply side.
Khachab intends to use the new funding on product and technology development, support the company’s growth in the U.S. and Europe, and to expand into additional markets. He also plans to increase the company’s employee headcount from its current 400 to between 600 and 700 by the end of the year.
Some of the new features in beta include financial services capabilities that will have Choco assuming the risk for suppliers by acting as the money collection agency for them so they get paid within 24 hours, while enabling restaurants to have more time to pay.
“We want to cover the whole U.S. and European food system,” Khachab added. “The main focus for the next 36 months will be building value-based software for suppliers, who are dealing with margin and price pressures, and it is hard for them to collect money. They are going to become our main customer at this point.”