Two startups tackling different pain points in the oft-forgotten food supply chain received a hearty dose of capital this week. Cold chain logistics provider for grocery Green Rabbit announced a $31 million investment from Guidepost Growth Equity, a firm focused on high-growth tech companies. Meanwhile, Choco, a mobile platform startup for chefs, raised a $33.5 million from Bessemer Venture Partners to bring the antiquated ingredient ordering process into the digital age.
For Green Rabbit, the round marks the first influx of institutional capital that the startup has accepted and is intended to expedite its growth in what it views as the $20 billion e-commerce food and grocery delivery market.
“As online grocery and perishable food sales represent one of the fastest-growing segments in e-commerce, major retailers and CPGs are looking to maximize their digital growth strategies,” said Won Park, principal of Guidepost Growth Equity, said in a statement about the funding. “We’re excited to partner with Green Rabbit to help them become the cold chain logistics standard that powers the future of digital food service initiatives.”
Green Rabbit is aiming to provide temperature-sensitive and perishable foods in a safe, fast, cost-effective manner. Its proprietary supply chain tech automates distribution, fulfillment, and delivery to give businesses real-time visibility for each order. It uses proprietary algorithms to ensure that orders are managed and packed appropriately and boasts the highest food safety compliance certification available, an SQF Level 3.
Perishables have been one of the most persnickety aspects of the grocery delivery game, giving tech entrepreneurs a limited window of time in which the goods can be safely handed off from the delivery maker to the order recipient. The company began as Candy.com and managed primarily temperature-sensitive confectionery products. It has expanded its services and capabilities since then to ship more than 5,000 perishable items across 150 brands.
Smart ingredient sourcing
Choco has now raised a total of $41 million and counts Atlantic Labs, Target Global, Visionaries Club, and Greyhound as other investors in this latest round. The mobile ordering platform allows restaurants to use an app to contact ingredient suppliers in lieu of having to make phone calls and leave voicemails. It features a messenger app that allows chat-style communication between suppliers and restaurants as well as an ordering list function that makes it easy to scoop up a variety of goods.
“[Leaving voicemails] a very tedious process and one that’s very prone to error but [restaurants] are going to repeat it every day,” Choco CEO Daniel Khachab told TechCrunch. “This ‘system’ is highly inefficient and wasteful, but it’s our main competitor.”
Khachab also said that he sees opportunities for the technology to help cut down on food waste by connecting more restaurants and suppliers. The analytics built into the platform and improved communication among buyers and sellers will hopefully reduce issues like overstocking and inefficiency. By his estimate, nearly three-quarters of the food waste produced in our food system each year happens along the supply chain before consumers are involved.
The 18-month-old startup has been moving at lightning speed. It boasts 100 employees to date and hopes to grow its business 15x by the end of 2020. It currently serves 15 cities throughout the US and Europe and counts Michelin restaurants among its clientele.
Guest article: The real impact of tariffs on US produce prices