Going Nuts on Growth, Snacking & Scalability

Why we invested in KoRo €50m Series B round

By Ivan Farneti and Saskia Hoebée

KoRo GmbH is a Berlin-based company that is rapidly on its way of becoming a leading DTC brand for natural and healthy food. Because they aim to bypass the traditional retailers and source directly from producers, they can provide customers with attractive prices while paying suppliers a fair value and ensure a transparent supply chain throughout.

Since we first met Piran, Kosta and Florian, KoRo has been growing at a spectacular 10x in 3 years while remaining profitable. This is a hockey stick curve we don’t see often in the food sector, and this does not happen just by chance.

Nailing scalability and reliability

KoRo develops and sells more than 1,200 products under their own brand, sourced from hundreds of suppliers. Last year the company generated more than €62m of revenues from 16 countries throughout Europe. In the food sector, a company needs master efficiency and develop a scalable set-up in order to do so, and this is exactly what KoRo nailed down. Scalability and reliability at Koro are a real mindset and their biggest asset. To sum up a few things that stood out to us:

- Mapping out all processes and decide what to outsource and what to run in-house: this is not easy with so many products and it requires strategic decision making and quantified models of cost/benefit analysis (peanuts for a management team with math and engineering backgrounds);

- A highly efficient central warehouse, internally supervised, with state-of-the-art WMS (warehouse management systems) staffed and maintained by a larger and efficient outsourcing partner;

- Operations are efficiently managed through a proprietary operating system that supports a number of standardized processes for onboarding suppliers, opening new countries, hire talent, and streamline sign offs, etc;

- New product development is supported by a rich set of real time data (spot commodity prices, copackers data, consumer demand, etc) reducing the risk of launching wrong products which (positively) affects their margins;

- And finally, we were impressed by the experience and skills of the management team at selecting marketing and business development activities that are massively repeatable and scalable across channels and countries.

Nailing creativity and product positioning: on-trend healthy snacking

KoRo operates primarily in healthy snacking, which is a market worth $23bn in 2021 and expected to grow at 4–5% a year, driven by millennials and Gen-Z moving away from the traditional 3 sit-down meals a day to include multiple snacking moments (in the office, in between classes, after sport, or when watching your Netflix series) with a particular attention to health and nutrition.

A healthy snack is consumed in small quantities, is low in sugar, salt and saturated fats, but ideally high in fibers and proteins. From nuts, grains and seeds to freeze-dried fruits and mixed cereals, to raw bars and energy balls to chocolate-coated almonds, or natural spreads, KoRo customers find a large assortment to build-up a meaningful basket (investors read: high AOV) with irresistible and mostly guilt-free options available through its webshop.

And then there is the Brand itself: smartly designed minimalistic packaging with an explicit choice of reusable materials and larger pack sizes, help KoRo reduce or avoid the need for repackaging (good for margins and for the environment), while involving suppliers in the country of origins of the products to “pack once” helps reducing food waste and share a higher portion of the value added locally.

In the future, we see the likes of Kellogs, Ferrero, Nestle’, Mondelez, Hain Celestial or Wessanen to pay attention to a company so innovative and a brand like KoRo, but at this speed of growth, this company could be a stand-alone, multichannel business that could hit its own IPO.

In the meantime, we can’t wait to start our partnership with KoRo and together with our friends and colleagues at Holtzbrinck Ventures, Partech and the Social Chain and bring our support and experience to this exciting company and team.

Lets’ go nuts about nuts!