October 18, 2024

By Gerelyn Terzo, Global AgInvesting Media

Blue Stripes, a U.S.-based cacao startup looking to transform the cocoa supply chain, has secured $20 million in a Series B round, attracting some high-profile backers to the deal that valued the company somewhere between $80 million-$120 million. The investor lineup included Berlin’s Zintinus, The Hershey Company as a returning backer and Whole Foods Market (where Blue Stripes products have been on store shelves since 2022), all of which led the round. They were followed by other institutional investors including DMG Ventures, Hamilton Lane and Praesidium.

Founded in 2018 by Oded Brenner, Blue Stripes’ previous capital raising event was in 2021, when it attracted an undisclosed amount in a Series A round from Allon Ventures and Terpsi Capital. Brenner is also behind chocolate retail chain Max Brenner, earning him the nickname as Willy Wonka. Brenner and fellow co-founder Aviv Schwietzer seek to revolutionize the chocolate industry with their sustainable whole cacao approach. They seek to create a new niche within the industry through the unlocking of the untapped potential of the cacao superfruit, including benefits such as antioxidants, minerals and fiber.

Blue Stripes plans to direct the proceeds from the round toward its whole cacao process technologies, its new product pipeline, expanding distribution and raising awareness around the nutritional benefits of the cacao superfruit. The company takes an innovative approach to production with a view to slash cacao waste, bolster the value of the fruit and generate revenue streams for farmers.

To do this, it relies on a process known as upcycling through which it uses 70 percent of the cacao fruit that’s normally discarded in the conventional chocolate-making process due to the industry’s sole focus on the bean. Blue Stripes harnesses the cacao pod shell, fruit and beans to maximize its superfood benefits.

Cocoa is generally grown by smallholder farmers on land that spans 2 hectares (4.9 acres) to 4 hectares (9.8 acres), largely in West Africa, Latin America and Southeast Asia across the Criollo, Trinitario and Forastero tree varieties. The Ivory Coast recently earned a credit rating upgrade from S&P Global Ratings, owing to rising cocoa prices and exports, catapulting the Western African nation to within reach of investment grade.

According to the Upcycled Food Association, up to 40 percent of all food processed globally is either lost or goes to waste. The organization is looking to stem the tide by supporting the creation of new, high-quality products originating from surplus food. With hundreds of food producer members, the Upcycled Food Association’s members have salvaged close to a billion pounds of food waste, as of the latest available stats.

Blue Stripes’ Brenner stated, “For the last two decades of my career I focused on showing people the whimsical and romantic side of chocolate. In this next chapter, I am on a mission to change what happens behind the scenes of the cacao industry — reducing the negative cacao industry impact on the environment, improving the economic value cacao farmers receive for their work and sharing the incredible functional benefits that the cacao superfruit has with the world.”

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