Indonesia-based chocolate maker Krakakoa, which buys cocoa directly from smallholder farmers, has raised an undisclosed funding led by Impact Investment Exchange (IIX).
The financing was joined by Singapore-based LIC VC and SYSTEMIQ co-founder Jeremy Oppenheim, according to an official statement.
In addition to sourcing directly from Indonesian smallholder cocoa farmers, Krakakoa trains them on how to improve the production quality and yields as well as environmental resilience.
Krakakoa claims that it has helped farmers increase their income per kilogram of cocoa beans by an average of 62 per cent due to the price premium paid by it, while improved farming techniques have resulted in an average yield increase of 65 per cent.
It claims to more than double the income of farmers who implement the new techniques and sell to Krakakoa. IIX’s Impact Assessment estimates that for every dollar invested in Krakakoa, investors generate a net Social Return on Investment (SROI) of $2.51.
The enterprise, which says it is on track to break even by 2020, will use the funding to provide 1,000 smallholder farmers and 20 female factory workers with sustainable livelihoods and avoid over 64,000 kg of chemicals through environmentally-friendly farming methods.
An estimated 1.6 million Indonesian cocoa farmers earn under $3 per day.
“Gearing up to our Series A funding round in 2020, I’m thrilled to receive such support from a diverse range of investors. This speaks to our potential for growth and ability to scale our impact to benefit people, planet, and profit. With this latest funding, Krakakoa will be able to triple the capacity of our production facility, putting us on track to break even by 2020,” said founder and CEO Sabrina Mustopo.
Krakakoa sells its products at its flagship Bali store and at more than 160 other points of sale in Indonesia. It has distribution tie-ups in Singapore, the Netherlands, Germany, Belgium and the Czech Republic.