QOA brings in seed round to do for chocolate what Oatly did for milk
Munich-based QOA is gearing up to be among the first to bring a chocolate product to market that is 100% cocoa free.
It is also now backed by $6 million in seed funding in an investment round led by Cherry Ventures with participation by Fifty Years, World Fund, Nucleus Capital, Trellis Road, Pioneer Fund and Tet Ventures.
The company kicked off this year, founded by the sister-and-brother team of Drs. Sara and Maximilian Marquart. Sara Marquart is a food chemist with a specialty in flavor formation, while Max Marquart is a material scientist and now three-time entrepreneur.
The global chocolate confectionery industry was valued at over $208 billion in 2020, and is the largest part of the industry in the U.S. Two-thirds of the world’s cocoa supply comes from West Africa, but is at risk — one of the reasons the Marquarts decided to focus on it. Currently, up to 50% of the current cocoa supply is at risk due to pathogens and climate change, and cocoa is playing a role in both deforestation and forced child labor.
“Our food supply is threatened due to the way we eat,” Max Marquart told TechCrunch. “We love chocolate, however, we realized that there are some sustainability risks and wanted to do something about it so we can still have it in the future.”
Companies, like California Cultured and Voyager Foods, are also creating chocolate without the cocoa using different approaches. Meanwhile, QOA developed a fermentation process that uses natural byproducts from other food-making processes for its base material. It then uses proprietary microbactera and flavor formation to create a vegan product that mimics the texture and flavor of chocolate, but without any artificial additives, he said.
The fermentation process will enable the company to scale production by 2035 and be able to price its products the same or below the cost of traditional chocolate. In fact, Marquart is predicting that in the future, the chocolate market will have two pillars: one half that is exclusive, expensive products made with normal cocoa, and the other QOA products.
QOA was part of Y Combinator this year and was able to get its product test kit going so people can sample nine options. Marquart expects to have QOA’s first product on the market in 2022, and the new funding will go toward building out its first pilot production facility in Munich to complement one it has in Switzerland and hiring.
The company is in talks with its first business-to-business customers and expects to close some smaller contracts soon, Marquart said.
“After that, we will go after our Series A so we can build out larger production lines,” he added.