Dive Brief:
- Technology startup Choco has secured $100 million in Series B funding, which brings the company's total funding to $171.5 million since it was founded 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 inventory updates, the company said.
- The company currently connects more than 10,000 restaurants and suppliers on its platform in the United States and Europe. The company plans to use this funding to add more functionalities, including payment tools, expand its footprint in its existing markets of the U.S., Germany, France, Spain, Austria and Belgium and add new markets.
- Choco's focus on supply chain efficiencies could be especially attractive now as 44% of small businesses have reported temporary shortages or other supply chain challenges in March 2021, driven by surging customer demand, relaxed restrictions and a backlog in ports and manufacturing facilities.
Dive Insight:
As the industry continues to navigate the COVID-19 environment, investors have shown significant interest in restaurant tech companies as operators chase efficiencies and consumers grow more digitally savvy.
Choco's inventory management technology enables operators to manage vendors and address backlogs in their supply chain. Over the past year, Choco's transaction volume has quadrupled as digital technologies accelerated.
Back-of-house tech company 86 Repairs also recently secured $7.3 million in funding, while Snackpass raised $70 million, 7shifts landed over $21 million, Goldbelly raised $100 million and Deliverect raised $65 million — all within the past few months alone.
Harley Miller, founder and managing partner of Left Lane Capital, which led Choco's funding round, said in a statement that, "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."
Choco also targets food waste through its supply chain technology, which sets it apart in the restaurant-adjacent tech space, as many food waste tech companies focus on the grocery space. For Choco, multi-unit restaurant brands comprise 40% of its current user base. A recent study from ChefHero finds that the restaurant industry loses about $2 billion in profits as a result of waste. Restaurant Hospitality reports that industry waste costs about $25 billion a year and preventing such waste can cut a restaurant's costs by 2% to 6%.
