Choco's funding helps it reduce restaurant food waste
Choco, a software provider that helps the hospitality industry cut back on food waste, said it raised a $111 million Series B2 led by G Squared and Insight Partners.
- The round confers unicorn status at a $1.2 billion valuation.
Why it matters: The deal shows that investors see green in brown gunk and related scraps in the kitchen dumpster.
- One-third of food intended for human consumption in the U.S. is discarded, according to the USDA. That waste load cost businesses and consumers an estimated $285 billion in 2019, according to a ReFED study.
- Food waste is also a major contributor to climate change, due to its transport, greenhouse gas emissions by agriculture, and the siphoning away of natural resources such as water.
Of note: While chefs are effective at keeping food waste to a minimum, a majority of waste occurs before it reaches the restaurant, CEO Daniel Khachab tells Axios.
How it works: Choco makes software that is designed to reduce errors and streamline supply chain issues.
- The U.S. is the company's largest market. France and Germany are among the other countries it serves, and it's also expanding to Portugal.
- The company is targeting hospitality or more specifically restaurants because the sector is highly fragmented compared to grocery.
Catch up fast: Six months ago Choco raised a $100 million Series B1. In all, the company has raised around $280 million, Khachab said.
By the numbers: The company said it achieved a gross merchandise volume run rate (the value of goods ordered annually via Choco's technology) of $1.2 billion in March.
- Khachab said that company plans to triple its gross merchandise volume this year.