Choco, the technology company building a connected global food system, announced that it has raised $100 million in Series B funding. The round is led by New York-based growth equity firm Left Lane Capital, who is joined by venture capital and private equity firm Insight Partners, with further participation from existing investors Coatue Management and Bessemer Venture Partners. The new round comes just over a year after Choco’s $63.7 million Series A and brings the company’s funding to a total of $171.5 million in just three years.
Choco is helping the food service industry return stronger in a post-pandemic world by enabling a major shift towards digitization. Choco has become an indispensable technology tool for hospitality operators, enabling more efficient food procurement processes and reducing operational expenses between restaurants and suppliers. The company’s core product is a digital ordering workflow and communication tool for restaurants and suppliers to facilitate food procurement. Choco has over ten thousand active restaurants and suppliers on its platform across the US and Europe.
Choco’s mission is to make the food supply chain more transparent and sustainable in order to help increase margins in the food service sector and combat climate change. Food waste is the third largest driver of climate change and the single largest reason for deforestation; as much as 40% of the world’s food goes to waste before reaching a customer’s plate due to myriad steps within the supply chain. Choco works with food industry leaders, suppliers, distributors and restaurants to help digitize the food supply chain and enable more efficient food procurement processes and business growth.
The food 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. As a result, Choco has seen growing demand for its service, with platform transaction volume quadrupling in the last year, and even further accelerating as more cities come out of strict lockdowns and restaurants build back their on-premise business.
The company has made key hires to continue to push innovation, starting with the recent hire of Vikas Gupta (ex-Uber, Facebook) as CTO. With Gupta at the development helm and the new round of financing, Choco will continue adding new functionalities that respond and cater to real-time changes in the food services industry.
“Food supply chains across the globe have been stress tested in the last 15 months due to the COVID-19 pandemic. This financing round enables us to build the technological backbone to make global food systems resilient, flexible and less wasteful. We have a big mission: to eradicate food waste – and this capital allows us to expand globally, assemble a world-class team and deliver a product and service that is indispensable for restaurants and suppliers looking to operate more profitably, efficiently and sustainably,” says Daniel Khachab, Choco CEO.
“Choco has established itself as the leading digital food procurement platform globally, and we’re excited to support the company’s growth into new markets, while continuing to build out best-in-class technology and payment tools for its customers. Having spent over a decade investing in the broader food tech landscape, we’ve seen that the wholesale/procurement side of the marketplace has experienced the least amount of innovation and received a fraction of the investment dollars. Choco is here to change that,” adds Harley Miller, founder and managing partner of Left Lane Capital.
Rachel Geller, managing director at Insight Partners says, “For an industry still largely driven by paper, Choco helps restaurants and suppliers not only digitize order management workflows but increase margins, efficiency and transparency all while enabling growth and accelerating the world towards sustainable food systems. We’re excited to support the Choco team and their mission.”
The Series B funding will help Choco continue their momentum into 2022, growing its existing customer footprint in its six current markets: the United States, Germany, France, Spain, Austria, and Belgium. The company will also expand into several new markets and double its head count by end of the year. Choco aims to be the cutting-edge technology provider for the food system.
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