Monday, 03 March 2014 00:00

Asia’s Richest Man Invests Millions in Artificial Egg Startup

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Li Ka-Shing who is ranked as Asia’s wealthiest man according to the Bloomberg Billionaires Index, with a net worth of $28.8 billion, was recently photographed scrambling artificial eggs. For a man with that much money you may indeed be asking yourself why, but these eggs have been produced by a company called Hamton Creek, a Silicon valley startup. The CEO in the photo pictured with Li Ka-Shing is Josh Tetrick who has just received US$ 23 million in a round of investment from Li. The company is now planning a major expansion into the Asian market. The company aims to reduce costs significantly in the egg market by introducung the lower cost substitute. The interesting thing about this deal is not just the nature of the business but the growing trend in which Silicon Valley start ups are now going over to Asia to seek new funding and tap wider markets. This trend happened over the last 10 years in which startups from the valley targeted Europe and European investment.

In addition to artificial eggs which are produced from a plant-based material Hampton Creek also produces an egg free type of mayonnaise. Recently the 2 year old start up has been doing well in the US where it has already secured deals with six Fortune 500 food manufacturers and retailers. The company has grown quickly and now has 50 full time employees. Less than four months ago the company also secured US$5.5 Million in a previous round of funding, but sees the larger opportunity in Asia starting with China.

Interest in China stems from its rapidly growing economy and huge population, which is being driven faster than the US economy, despite recent issues. Another potential benefit for Hampton Creek are the scares that have been coming from the Avian flu cases in the Chinese chicken population and use of antibiotic in bird breeding. This has been an ongoing issue which raises concern about food safety and basic hygiene. With all these factors in play Josh Tetrick sees it as a big opportunity to enter the market which his artificial egg products which will be dused in backed packaged goods where taste is not a drawback. From a cost factor the Hampton Creek artificial eggs are said to be 48 percent cheaper which by any means is a competitive asset to this market. In an a recent article report by Wired, Tetrick was quoted as saying “The demand is so intense and the partnership we have with Li Ka-Shing’s group is so wildly phenomenal for us, we think it’s important for us to start by the end of this year,” and is planning to triple his employee’s as he ramps up his Asia expansion.

This is nothing new for US business and Hampton Creek is by no means the first to use this strategy, Spotify the streaming service also part owned by Li began expanding into Asia right after competitor Pandora, whose investors include Asia focused venture capital group GGV capital. Houzz the home improvement market place also launched in Asia after investment from GGV Capital who joined its series C round of funding in January. Also another big splash in the Asian market was when the messaging and call service startup Viber was snapped up for $900 million in recent weeks by Japanese internet company Rakuten. This deal is expected to strengthen and push Viber’s presence in Asia.

These type of Asian expansions are expected to proceed especially with the growing number of venture capital firms who are focused on matching Silicone Valley startups within the Asia market. This includes GGV, GSR, Formation 8, and the Asia divisions of Silicon Valley powerhouses like Seqoia Capital and NEA. Asia offers a great window for tech companies to power their growth but also allows floundering startups with a second chance especially with the new abundance of capital coming from China.

 

Read 576 times Last modified on Monday, 03 March 2014 08:35
Mary Chan

Mary is the Senior Editor at fundedflow