- Tech startup Choco secured $100 million in Series B funding, bringing the company’s total funding to $171.5 million since its inception in 2018, according to a press release. Choco’s technology enables efficient food procurement processes and reduces operational expenses between restaurants and suppliers by providing inventory management and live stock updates, the company said.
- The company currently connects over 10,000 restaurants and suppliers on its platform in the United States and Europe. The company plans to use this funding to add more features, including payment tools, expand its presence in its existing markets in the United States, Germany, France, Spain, Austria and Belgium and add new markets.
- Choco’s focus on supply chain efficiency could be particularly appealing now, as 44% of small businesses reported temporary shortages or other supply chain issues in March 2021, due to growing customer demand, eased restrictions and a backlog at ports and manufacturing facilities.
Overview of the dive:
As the industry continues to navigate the COVID-19 environment, investors have shown significant interest in restaurant technology companies as operators seek efficiency and consumers become more digitally savvy.
Choco’s inventory management technology enables operators to manage suppliers and address backlogs in their supply chain. Over the past year, Choco’s transaction volume has quadrupled as digital technologies have accelerated.
Back-of-house tech company 86 Repairs also recently secured $7.3m in funding, while Snackpass raised $70m, 7shifts landed over $21m, Goldbelly raised $100m. dollars and Deliverect raised $65 million – all in the last few months alone.
Harley Miller, Founder and Managing Partner of Left Lane Capital, which led Choco’s funding round, said in a statement that “After spending more than a decade investing in the broader food tech landscape, we have seen that the wholesale/supply side of the market saw the least innovation and received a fraction of the investment dollars. Choco is here to change that.
Choco also targets food waste through its supply chain technology, which sets it apart in the restaurant-adjacent technology space, as many food waste technology companies focus on the grocery store space. For Choco, multi-unit restaurant brands represent 40% of its current user base. A recent study by ChefHero reveals that the restaurant industry loses approximately $2 billion in profits due to waste. Restaurant Hospitality reports that industry waste costs approximately $25 billion a year and that preventing this waste can reduce a restaurant’s costs by 2-6%.