Plant-based startup Zero Egg raises $5m to support US expansion; brand is a 'gamechanger,' says Powerplant Ventures

By Elaine Watson

- Last updated on GMT

Plant-based startup Zero Egg raises $5m to support US expansion; brand is a 'gamechanger,' says Powerplant Ventures

Related tags Zero Egg plant-based egg

Zero Egg – an Israeli startup hoping to crack the US market with the launch of plant-based egg alternatives for CPG manufacturers and foodservice operators – has raised $5m in a Series A round led by Powerplant Ventures, and joined by existing investors Unovis Asset Management-New Crop Capital and Strauss Group-The Kitchen Hub.

The company – which claims to blow rivals out of the water in terms of taste, versatility and affordability – has two products: EGG Basics​ (designed for scrambles, omelets, quiches and egg bites); and BAKE Basics​ (for cakes, cookies, pancakes & waffles, pasta, mayo and dressing).

Made from a patent-pending blend of plant proteins (soy, potato, pea, chickpea) with 10-15 calories per ‘egg’ before oil is added, and no cholesterol, both Zero Egg products come in shelf-stable powder form (users add water and oil).

The initial line up of branded Zero Egg b2b products – which are co-manufactured in Cookeville, Tennessee and distributed by Gordon Food Service – will be followed next year by retail products, said CEO Liron Nimrodi, who co-founded Zero Egg​ ​in 2018 at Israeli seed investor and tech incubator The Kitchen FoodTech​ Hub​ and has raised around $3m in seed funding prior to the Series A.

Powerplant Ventures: ‘This is a game-changer for the industry’

Powerplant Ventures - which has also invested in Eat Just Inc​,​ maker of the plant-based JUST Egg - said Zero Egg was a potential "game-changer for the industry."

Co-founder and partner T.K. Pillan (co-founder of the Veggie Grill restaurant chain), who will join the Zero Egg board of directors, said: “I’ve been on a mission to offer practical plant-based options for consumers at both the retail and restaurant level for many years. What has been missing until now is a complete, affordable plant-based alternative for eggs.”

Dan Y. Altschuler Malek, managing director at Unovis Asset Management-New Crop Capital, who is also on the Zero Egg board, added: “The egg category is massive and the potential to disrupt it with an accessible plant-based solution is fairly untapped in the food industry...

 “It was an easy decision to continue investing in Zero Egg because it is uniquely positioned given its functionality, taste, and competitive pricing.” 

Amir Zaidman, VP business development at Strauss Group-The Kitchen Hub, noted that Zero Egg started life in 'The Kitchen' incubator, adding: "The support of investors such as Powerplant Ventures and Unovis-New Crop Capital are strong votes of confidence, and what we see as a big step forward for the plant-based egg category.”

We’ve essentially removed all of the barriers to entry’

Zero Egg’s North American business is led by Isabelle Francois, who spent 11 years at Whole Foods Market, most recently as VP, 365 by Whole Foods, and was impressed by Zero Egg’s functional qualities and sustainability credentials.

Speaking to FoodNavigator-USA last month​, she said: “There are no other plant-based egg solutions that do it all, that can deliver on taste, versatility – we're delivering the functionality of a whole egg - and affordability. We’ve essentially removed all of the barriers to entry.”

Launching mid-pandemic

While gearing up for US market entry in the middle of a global pandemic that has significantly disrupted the food industry was “nerve-wracking​,” recent events have only intensified interest and investment in plant based eggs, meat, and dairy, claimed Francois.

"Four of the largest QSR chains in the US have launched plant-based breakfast sausages, so that opens up the breakfast category for us as consumers are looking for plant-based eggs to go with plant-based sausages.

"The high yields are also very appealing to partners. With a 2lb foodservice bag it's between 86 and 130 eggs. There are also no refrigeration costs and safety issues associated with liquid eggs or shell eggs."

Allergens, food safety

For CPG manufacturers, meanwhile, said Nimrodi, it’s not just about tapping into the plant-based trend, “it’s also about avoiding allergens, food safety issues such as salmonella, and consistency of price and supply ​[conventional egg prices are notoriously volatile and subject to fluctuations caused by avian flu and other factors].

“Zero Egg has the same functionality plus it’s a stable product with a long​ [12-month] shelf-life.”

While plant-based eggs don’t contain some of the key nutrients in conventional eggs such as choline, selenium, and vitamin B12, said Nimrodi, “The team is working on a roadmap to improve all of the attributes including the nutritionals.”

Plant-based egg IPO?

The funding was announced as Eat Just said US retail sales of its mung-bean-based JUST Egg product had "skyrocketed​" in recent months, with JUST Egg MULO (multi-outlet) unit sales up in the triple digits, and the frozen Folded JUST Egg now the #1 selling frozen breakfast meal/entree in the grocery channel.

Speaking to FoodNavigator-USA in August,​ Eat Just CEO Josh Tetrick said he hopes to turn an operating profit before the end of 2021, at which point the company will consider an initial public offering (IPO).

To those wondering whether investors will see a return on the hefty sums ($300m+) the San Francisco-based firm has raised to date, the market opportunity is huge, claimed Tetrick. “Our addressable market is the $238bn global chicken egg market​​ [spanning retail eggs ($122bn), frozen breakfast products ($8.9bn), foodservice ($48.8bn), and ingredients ($73.2bn)].”

“More human beings today are consuming egg protein than any other animal protein.”

Ingredients, Zero Egg EGG BASICS​ : Soy protein isolate, pea flour, cellulose fibers, dried yeast, gellan gum, modified cellulose, chickpea protein powder, salt, sugar, agar-agar, potato protein powder, turmeric extract (for scrambles, omelets, frittatas, quiches, egg bites, cookies, and sauces).

Ingredients, Zero Egg BAKE BASICS​: Soy protein isolate, pea flour, agar-agar, powdered cellulose, dried yeast, modified cellulose, chickpea protein powder, salt, sugar, gellan gum, potato protein powder, turmeric extract (for cakes, muffins, cupcakes, cookies, pancakes, waffles, pasta, and custards).

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