Uncommon Cacao Raises Impact Investment Capital From Acumen, PI Investments

Thursday, June 23, 2016

OAKLAND, CA: Uncommon Cacao, an industry-leading premium cacao supply chain operation, announced the closing of its Series A impact investment capital raise led by Pi Investments as lead investor and Acumen as the largest investor in the round.

Founded in 2010, Uncommon Cacao works directly with smallholder farmers in Central America to source, produce and export high-quality cacao and supplies to more than 90 chocolate makers in the U.S. and abroad through a sales operation based in Oakland, CA.  The public benefit corporation creates meaningful market access for smallholder cacao farmers, revolutionizing local economies by linking farmers to the specialty cacao industry through a focus on consistently delivering quality beans. The company has built a transparent supply chain that drives significant value to farmers, and creates meaningful impact for communities at origin.

Cacao, also called cocoa, is the raw material for making chocolate, a food product which has been experiencing rapid growth in the premium sector and transforming towards a focus on “craft” or “bean-to-bar” chocolate. When Uncommon Cacao first began operations in Belize in 2010, through its farmer-focused export operation Maya Mountain Cacao, there were only a handful of bean-to-bar chocolate makers in the U.S. There are currently over 300 such makers in the market today.

“It is time for a sea change in the chocolate supply chain towards decommotidization of cacao, as we have seen in coffee and other crops. Uncommon Cacao’s model is a supply chain focused on quality and transparency, which farmers and chocolate makers are proud to form part of,” says Emily Stone, CEO of Uncommon Cacao, Inc.

Uncommon Cacao had previously raised variable payment obligation debt, known as the Demand Dividend, through a syndicate led by the Eleos Foundation in 2013. Eleos and the syndicate converted the debt alongside the incoming Series A investors, and a number of investors from the original Demand Dividend group, including Wealth Plus, Inc. and Pi Investments out of California, re-upped to participate in the Series A.

“We are thrilled to deepen our work with Uncommon Cacao, and under such terms that will catalyze even greater and deeper impact at scale for the communities with which the company works,” says Morgan Simon, Managing Director of Pi Investments. “Applying an equitable and impact-focused lens on each term, the deal codified worker and farmer ownership, and a margin cap to ensure a fair distribution of benefit.”

Additionally, just prior to the closing of the Series A, Uncommon Cacao acquired Cacao Vivo, the direct sales brokerage division of Taza Chocolate.  Rebranded as Uncommon Cacao Source + Trade after the acquisition, this business division will serve as a platform for scaling farmer impact and cacao sourcing beyond Uncommon Cacao’s existing operations in Central America with the goal of reaching 10,000 farmers across the tropical belt within the next five years.

Other innovative aspects of the deal include the establishment of a non-profit Farmer Fund which will hold equity in Uncommon Cacao, Inc. and receive a profit share from sales of cacao, and the reorganization of the company from a Massachusetts LLC into a Delaware Public Benefit Corporation.

“We are extremely excited to partner with Uncommon Cacao and all its stakeholders to collectively build an industry leading enterprise that is deeply committed to product quality, supply chain transparency, and meaningful social impact for farming communities at origin,” says Sean Moore, Associate Director and deal lead at Acumen.

Hogan Lovells US LLP provided invaluable legal assistance to Uncommon Cacao in connection with the investment and acquisition. Stone notes, “The high-level and high-touch professional support of Hogan Lovells throughout the 11 month-plus process of this Series A round was invaluable. We simply couldn’t have done it without them.”

Agriculture, Investing
impact investing, smallholder farmers