Sabrina Mustopo, Krakakoa's founder and chief executive officer, in a black polo shirt, with Krakakoa smallholder farmers. (Photo courtesy of Krakakoa)
Krakakoa Secures New Funding, Set to Boost Income of Smallholders
JULY 27, 2019
Jakarta. Krakakoa, an Indonesian bean-to-bar chocolate maker that has made it their mission to empower the country's smallholder cocoa farmers, has secured a new funding to expand its business, the company said in a statement on Friday.
Singapore-based investors IIX Growth Fund, LIC VC and Jeremy Oppenheim, the co-founder of SYSTEMIQ, were all involved in the Series A funding, whose total amount remains undisclosed.
"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 and to profit," Sabrina Mustopo, Krakakoa's founder and chief executive officer, said in the statement.
The company said it would use the money to fund its collaboration with 1,000 smallholder farmers and 20 female workers in its chocolate factory.
"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," Sabrina said.
Sabrina founded Krakakoa in 2013, following a six-year stint with management consulting company McKinsey and Company where she was involved in the development of sustainable agriculture around the globe.
According to Krakakoa, Indonesian cocoa farmers are often shortchanged by middlemen who sell their products to chocolate factories. The high cost of fertilizers and pesticides, driven by a similar middlemen-dominated market structure, makes things worse for the farmers.
Many of them are forced to withstand a subsistence livelihood, Krakakoa said, adding that an estimated 1.6 million Indonesian cocoa farmers earn less than $3 per day.
The company has now set up a business model that allows them to buy high-quality beans directly from the farmers at a premium price.
To ensure sustainability, Krakakoa provides training programs for the farmers to improve the quality and yield of their product.
"Krakakoa provides our female factory workers with stable wages to help us produce and distribute retail-ready premium chocolate bars and related products," the company said.
According to data, Krakakoa farmers have managed to increase their yield by 65 percent and save up to 22 percent in costs thanks to advanced farming techniques and a concerted effort to avoid chemicals in their products.
The Impact Investment Exchange (IIX), a global organization that directs investments toward women empowerment, climate action and community resilience, had estimated that for every dollar invested in Krakakoa, investors generate a net Social Return on Investment of $2.51.
"It is a pleasure for IIX to be able to support Krakakoa across different stages of growth – first through technical assistance and a capital raise, and now with direct investment from the IIX Growth Fund," Robert Kraybill, the managing director and chief investment officer of IIX, said.
Krakakoa now exports its premium single-origin and flavored bars as well as chocolate barks and snacks to Singapore, the Netherlands, Germany, Belgium and the Czech Republic. It has won four silver and three bronze medals from the Academy of Chocolate and RedDot Design Awards for packaging and product quality.