With the app from the startup Choco, restaurateurs can order groceries from wholesalers. The technology is as simple as a WhatsApp chat. Renowned investment firms such as Coatue, Insight and Bessemer believe in the startup, which is now said to be worth more than $ 600 million. In the OMR podcast, founder Daniel Khachab also reveals the meaning of the startup’s name – and why Choco is not about chocolate.
You’d think that times weren’t easy for Choco: The Berlin startup is developing a platform that restaurants can use to order goods from wholesalers. The potential is great, after all, in the past these processes were still very analogue via telephone or fax. But there is also this global pandemic, which also makes business more difficult for operators of restaurants and pubs. In the case of Choco, that hardly seems to play a role – despite the pandemic, the startup was able to raise $ 100 million in fresh capital from investors last year. The company’s valuation doubled to around $ 600 million.
And so Daniel Khachab has big goals despite the pandemic: “I believe that Choco has the potential to become one of the largest companies ever.” Digitize the supply chain and thus have opened up one of the largest markets ever. But Khachab also thinks beyond business: “We create more value than just sales. We can really reduce food waste. “
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Choco makes a living from financial services
Khachab founded Choco around three and a half years ago together with Julian Hammer and Rogerio da Silva Yokomizo in Berlin, after having previously gained experience at Rocket Internet. The Choco app is similar to messenger apps such as WhatsApp or Facebook, except that restaurateurs can use the app to place orders with various retailers – and without additional fees. Because the startup earns money with financial services. For example, restaurateurs are offered to pay the bills later, while retailers can request their money immediately. In both cases, Choco will be reimbursed for the service.
The financial services are relatively new, initially Choco worked on the ordering software and customer acquisition. Today more than 15,000 restaurants and more than 10,000 wholesalers use the Berlin platform. The USA is now the largest market. “We didn’t have a marketing department in the first two years, we didn’t even have a website in the first two years,” says Daniel Khachab on the OMR podcast. Nevertheless, the company has grown rapidly, sometimes starting in a new city on a weekly basis. “We had really fast growth,” says Khachab: “Then came Covid, then came the lockdown – and from one day to the next all your customers are closed.” On the OMR podcast, Daniel Khachab reveals how the startup reacted to this and how to do it helped wholesalers keep selling groceries.
450 new employees by the end of the year
In the meantime, Choco can focus on its core business again. According to Khachab, the startup is growing mostly through word of mouth. Wholesalers would recognize the advantages of the app and then recommend the restaurateurs they supply to rely on Choco. They, in turn, were quickly convinced because they are already used to using messenger apps, so using Choco does not seem particularly complicated. “When I’m a cook, I have different tools: knives, spoons, saucepans. I’ll get them out of the drawer and they’ll work. It’s the same with Messenger, ”says Daniel Khachab on the OMR Podcast. From his point of view, simplification is the criterion for success.
With the fresh capital from the last round of financing, the startup can further accelerate its growth. By the end of the year, the number of employees is expected to increase from currently around 350 to around 800. The team was also strengthened with experienced managers who had previously worked for companies such as the social network Facebook or the music services Spotify and Soundcloud. In an interview with Philipp Westermeyer, Daniel Khachab reveals which steps were necessary in the company to manage this rapid growth.
The name Choco has nothing to do with chocolate
In the OMR podcast, Daniel Khachab also explains where the name Choco comes from. Contrary to what you might think, it has nothing to do with chocolate. According to Daniel Khachab, the name is instead derived from the Colombian district of Chocó. This is part of one larger area on the Pacific coast of South America. “This is a very untouched, very biodiverse region,” says Daniel Khachab, who himself lived in Colombia for a while in the past. From his point of view, the name fits very well with the goals of the startup, which on the one hand wants to offer the largest possible range, but on the other hand wants to help limit food waste.
The founders were therefore prepared to pay a lot of money even as a very young company in order to secure the rights to the corresponding Internet domain. The founder Philipp Westermeyer reveals exactly how much it was in the OMR podcast.
The topics of the podcast with Daniel Khachab at a glance:
- This is how Choco makes money (06:30)
- How Choco Caused the Pandemic (17:30)
- What connects gorillas and choco (8:30 p.m.)
- Choco wants to conquer the world (26:00)
- What is important in fundraising (32:30)
- Why the founders named their start-up Choco (40:30)
- How to proceed now (44:00)
