Though employee engagement has increasingly become a focus of modern corporate leaders, particularly in the current “war for talent” where employers are actively competing against each other to win skilled employees. While companies spend more and more time each year trying to measure and improve employee engagement, Gallup reports that only 15% of employees are actively engaged at work.

Tech companies in Silicon Valley are particularly known for throwing extravagant perks at employees to retain talent, including catered meals, on-site massage therapists, and lavish company parties. Each new offering or event makes an impact on a company’s culture, arguably one of the most important assets a company has to cultivate and maintain.

Events and team-building activities play a large role in establishing company culture. A properly-planned event  has many benefits, including improving morale among employees, decreasing stress and thereby increasing productivity, and offering the opportunity for social bonding that will allow more collaborative work to be done. While many tech companies opt for a standard field day approach, complete with food, alcohol, and entertainment, innovative companies raise the bar by offering events that are distinctive and memorable.    

tinyB chocolate was incorporated in 2014 as a handmade chocolate company making Brazilian brigadeiros in the style of founder Renata Stoica’s heritage. While the company does sell their chocolates online and, in December 2018, at a pop-up retail location in San Francisco, they moved beyond traditional chocolate sales to develop a unique model for their business: corporate team-building events. 

Top companies in Silicon Valley and beyond turn to team-building events to engage their employees, highlight a fun and casual office culture, celebrate holidays, and reward their teams. tinyB chocolate offers brigadeiro-making team-building as a delicious, crafty alternative to more common team-building events. A tinyB chocolate staff member first educates attendees on Brazilian brigadeiros, including their influence on Brazilian culture. Then, attendees are presented with a brigadeiro-making station where they can roll their own brigadeiros with a variety of toppings. They are encouraged to make as many brigadeiros as they’d like, including to bring back to their desks or take home. After attendees have gotten the hang of brigadeiro-rolling, the event ends with a Chocolate Challenge during which teams compete to produce the most beautiful brigadeiros. 

tinyB sells these team-building events primarily to administrative employees at tech companies in the Bay Area who are seeking creative event options to build culture and retain talent. tinyB estimates that the market for team-building activities in the Bay Area alone is $70M per year, based on the assumption of 7,000 administrative decision-makers, each supporting 50 employees and spending $200 per year, per employee on employee engagement events. 

tinyB chocolate was founded by a husband-and-wife team, Renata and Andrei Stoica. Renata is Brazilian and worked as a nurse before founding tinyB; she is the company’s Chocolatier, crafting the brigadeiro product and leading corporate events. Andrei has previously founded two tech startups, Panopticon and ConnectAndSell; Panopticon exited for $100M and ConnectAndSell is still growing, having raised at least $12.6M in venture capital to date. He manages the business side of tinyB, making connections with clients, closing deals, and monitoring finances and operations. 

tinyB chocolate has ambitious plans for growth, with the goal of 100% year-over-year growth for 2019 and 2020 and 75% YoY growth for the next three years. They hope to achieve $7M in revenue and $3M in EBITDA in the next five years. 

tinyB has given thought to exit strategy; they hope to position the company for acquisition within five years at a valuation of $25M or more. Their analysis of acquisition value is based on research they commissioned from Stout, who developed an estimate of multiple based on publicly-traded comparables like Rocky Mountain Chocolate Factory. 

To achieve these goals for growth and acquisition, tinyB is realistic about the need to expand their target market and/or diversify their services and revenue streams. While the company currently gains the bulk of its revenue from corporate events, they realize that a given client will likely not hire tinyB for an identical event for at least several years; therefore, they must offer innovative event types to re-engage past clients, or investigate new revenue streams like e-commerce or pop-up retail to gain revenue from additional sources. 

• Diversified Revenue: While tinyB has enjoyed success from their corporate events, the company’s growth potential is attractive through diversified revenue that includes not only corporate events but also e-commerce, pop-up retail, and potentially consumer-focused events reminiscent of Paint Nite (which the company cites as inspiration). As this capital raise allows tinyB to expand their focus to increasing shelf-life of the product and scaling production, their revenue options will expand, allowing for protection against slower growth in any single revenue category.

• Employee Engagement and Experiential Tailwinds: Companies are increasingly prioritizing employee engagement. Many employers, particularly tech companies constantly competing for highly-skilled talent, are spending on innovative events that promote employee engagement and offer a talent advantage over competitors. In addition, the millennial generation is said to have ushered in the rise of the experience economy, in which consumers prioritize experiences (from Paint Nite to Tough Mudder) over material goods. tinyB’s potential consumer-focused events capitalize on this trend by using their chocolate product as a vehicle for fun and connectivity among event attendees.
   
• Recent Growth: Though tinyB was incorporated in 2014 and has been operating for many years, the company has grown rapidly in the most recent two years of operation. Revenues grew by 44% between 2018 and 2019, and reported growth for Q2 2019 was 120% from the same period in 2018. Future growth has the potential to be strong, as this capital raise allows tinyB to build a production facility and hire full-time staff to scale operations. 

tinyB chocolate is far from a traditional chocolate company. Founders Renata and Andrei Stoica have cleverly designed a business model that separates them from the pack of e-commerce foods and focuses instead on cost-effective corporate team-building events (and possibly consumer events in the future) to diversify revenue. Moreover, co-founder Andrei is a successful tech entrepreneur, which is evident in the company’s focus on scalable growth and acquisition opportunities. 

tinyB is focused on acquisition opportunities within the next five years, and has provided an estimate of $25M exit value based on their growth goals. While tinyB’s unique blend of event services and CPG retail revenue is difficult to find in comparables, companies like Paint Nite ($120M revenue) and Rocky Mountain Chocolate Factory ($35M revenue) have each demonstrated success in their respective revenue categories.  

tinyB chocolate is a Deal to Watch because it is led by a highly successful serial entrepreneur, has a novel diversified revenue approach, and is capitalizing on trends of employee engagement and experiential activities. While tinyB’s Brazilian brigadeiros are delicious, it’s the company’s innovative approach to the artisanal chocolate space that truly sets it apart.