Love Cocoa, the UK chocolate maker set up in 2016, has secured GBP4.3m (US$5.3m) in Series A funding, with its valuation amounting to more than GBP10m.
The funding came from Richard Koch, a venture-capital investor in companies including coffee-chain Grind and Plymouth Gin. The size of his stake in Love Cocoa has not been disclosed but Koch has now become a significant minority shareholder in the company.
Love Cocoa, which sells its namesake chocolates through UK retailers including Harrods and John Lewis, said the funds will be used to open its first physical outlet. It has plans for ten brick-and-mortar stores in the next three years.
The company wants to increase the distribution of its oat-milk brand H!P Chocolate, which is stocked in retailers including Tesco, Sainsbury’s and Ocado. The business is also planning to add a finance director and head of marketing to its senior management team.
The physical shops will provide high-street customers with a unique experience that “cannot be achieved shopping online”, the company said. Love Cocoa will continue to sell its eponymous chocolates through retailers that also include Fenwick, Liberty and Selfridges.
In response to how Love Cocoa’s future stores will compete against rival confectionery outlets, CEO James Cadbury said: “As well as selling our Love Cocoa and H!P Chocolate products, we will be offering hot chocolate and ice cream and we have a couple of surprises up our sleeves as well. We see this as a real game changer for the business and we cannot wait to open our first store.”
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On the expansion of the senior management team, Cadbury noted that “with any young business, adding more experienced people to the team will provide additional structure”.
The decision to invest in physical stores comes amid the cost-of-living crisis and fears the UK will enter a recession.
However, Cadbury is optimistic about Love Cocoa’s future business development. “When it comes to economic recessions, consumers always want to treat themselves with a little something, and that tends to be something sweet like chocolate. While they may decide against a new car or a holiday, on a weekly basis, consumers want that little bit of indulgence a bar of chocolate can bring. It’s a moment of joy.”
The Love Cocoa CEO, the great-great-great-grandson of the founder of the Cadbury chocolate brand, added the management team will consider the company going public by way of an IPO in the future.
Love Cocoa and H!P Chocolate have a combined retail value of GBP10m and have grown more than 300% in the last two years, the company said in its statement.