Berlin-based startup Choco Communications GmbH said today it has raised $111 million in a new round of funding to help it take on the growing problem of food waste.
The Series B2 round is an extension of the company’s $100 million Series B round last year, and was led by G Squared and Insight Partners. Following the round, Choco is now valued at $1.2 billion.
Choco is aiming to transform the food industry’s business processes in order to cut down on waste. It sells digital tools to the food service businesses, mainly restaurants, allowing them to do away with the manual spreadsheets and pen and paper that are still commonplace when it comes to ordering ingredients and recording sales. The idea is that not only does this allow businesses to become more streamlined, but it also reduces food waste, making them more sustainable too.
The key advantage of using Choco’s tools is that food businesses will be able to improve the accuracy of their orders, thus ensuring that fewer ingredients are wasted and thrown away. For example, if an ice cream vendor orders too much milk and can’t use it all before it expires, then that milk has to be thrown out, meaning it’s wasted.
The company is pursuing an admirable goal in trying to eliminate food waste. According to Choco’s data, roughly 35% of the world’s food supply ends up being thrown out before it’s served to consumers. This waste generates a carbon footprint of about 3.3 billion tons of carbon dioxide per year.
Choco said it wants to digitize the global food wholesale market completely by 2026. As such, today’s funding round will come in useful as the company goes about recruiting more staff to achieve that goal. It said it wants to expand its team from around 400 employees now to more than 700 by the end of the year.
Choco will also launch in new markets. So far, it’s active in the U.S., Germany, France, Spain, Austria and Belgium. Its next target is Portugal.
Choco Chief Executive Daniel Khachab (pictured, third from left) said food wholesalers need more intuitive software for ordering, finance and logistics in order to digitally transform. “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,” he said.
Choco claims it has seen its user base grow by 350% in the last year, and the total value of goods traded through its platform exceeded $1.2 billion at the end of February 2022.
“Choco has achieved incredible growth over the past year,” G Squared’s Larry Aschebrook confirmed. “We believe Choco can be the backbone of foodservice in the years to come. Their software already shows impressive levels of user engagement and true value creation for customers.”