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There’s a lot of money in Asia for Silicon Valley’s more alternative, and capital intensive startups. Even some of those cleantech startups that are so hard to find funding for these days.
On Monday startup Hampton Creek Foods, which makes plant-based egg products, announced that it’s raised another $23 million in funding led by Horizons Ventures, a firm run by Hong Kong billionaire Li Ka-shing. Bloomberg ranks Li Ka-shing as #17 on the global billionaire’s list, and the richest man in Asia.
Other investors in Hampton Creek’s round included co-founder and former CEO of Yahoo, Jerry Yang, Google’s Jessica Powell, angel investor Scott Banister and previous investors Khosla Ventures and Tom Steyers’ Eagle Cliff. The company has raised $30 million in total to get its plant-based egg products — like its egg-free mayonnaise and egg replacer for baking — to market.
I visited Hampton Creek’s San Francisco office about a year ago — the food lab is a few blocks from startups like Twitter, Zynga and Airbnb. But Hampton Creek’s founder and CEO Josh Tetrick has the do-gooder spirit that’s more in line with those in the cleantech field, and the startup’s technology is based on lab research and culinary tinkering, not lines of code. That means for many investors — especially those burned by the more capital intensive sectors like cleantech — Hampton Creek Foods probably isn’t an obvious investment.
A disruptive plant-based egg product could help reduce carbon emissions by minimizing the feed used by the egg industry. If it can take market share from the egg industry, it could also help reduce some of those poor environmental and inhumane conditions of the egg industry. Above all though, it could be a cheaper, safer and more long lasting replacement for eggs, if consumers ever embrace it. Many of those consumers might be in China.
Hampton Creek isn’t the only non-digital, do-gooder company with ambitious goals that’s turned to Asia for a big funding round or help with commercialization. Khosla Ventures-backed Eco Motors, which makes a more energy-efficient motor, is commercializing its technology in China with a $200 million plant being built by Chinese auto giant Zhongding Power. Another Khosla Ventures company, biofuel and green chemical company LanzaTech, is commercializing its technology with Chinese steel giant Baosteel.
Tech startups from Silicon Valley are sometimes put on a pedestal by Chinese investors. The startups can demand high valuations and can get better deals than they would in California. The startups also can have the benefit of a large Chinese corporate partner that can quickly build a factory — much more quickly than a company could in California.
Many sectors in cleantech have headed to China to commercialize their technology like carbon capture technology (GreatPoint Energy) and electric car batteries (Boston Power). The sustainable food companies look to be following this path, too. Khosla Ventures has backed a half dozen eco food startups in recent years.