Investors double down on $1.2B food waste startup

Choco, a German software startup that helps food producers and restaurants better manage food inventory, netted $111 million in Series B2 funding at a $1.21 billion valuation, CEO Daniel Khachab tells Axios.

Why it matters: Choco's second nine-figure funding round, complete with a unicorn-level valuation, signals how quickly climate tech and adjacent industries are maturing.

Driving the news: This round comes just six months after Choco closed its $100 million Series B.

• The follow-on round was comprised entirely of existing investors. G Squared led the round and Insight Partners participated. The deal did not include additional board seats, Khachab says.

How it works: Choco makes software for restaurants — namely chefs — and food suppliers.

• The product includes a free app for restaurants that lets restaurants order food from suppliers.
• The suppliers' software is a bit more complex and includes data insights into the formerly opaque journey from farm to facility and ultimately to table.
• Suppliers can access the most basic functions of Choco's software, which is available on web or via an app, for free. Additional functions come with a commission-based transaction fee.

The intrigue: Choco is essentially moving an outdated process online the way many other companies in a host of other industries have been doing for decades.

• Depending on your outlook, that could either undercut or reinforce its most recent valuation.
• There's little stopping producers from rolling out similar but proprietary apps and avoid the commission fees.
• At the same time, middlemen-type businesses have flourished in the tech industry and elsewhere, leaving plenty of room for Choco to own a sizable portion of the market.

The bottom line: Growth investors are bullish enough to double down even as public markets remain volatile and offerings remain elusive.