Saudi prince backs $40m funding for dairy replacement producer

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KBW Ventures, the venture capital firm founded by Saudi Arabia’s Prince Khaled bin Alwaleed, was one of the prime investors in a $40 million fundraising round by a Californian company that is aiming to become the world’s first true plant-based dairy replacement producer.

Oakland-based Eclipse Foods was founded in 2019 by chef Thomas Bowman and alternative protein expert Aylon Steinhart. The company produces plant-based dairy products it claims are indistinguishable from conventional dairy.

Its latest $40 million Series B funding round was led by Sozo Ventures. In addition to Prince Khaled’s KBW Ventures, other leading investors included Forerunner Ventures, Initialized Capital and Gaingels.

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Prince Khaled told AGBI: “KBW Ventures decided to invest in Eclipse’s Series B based on a number factors, including their already-strong POS [point-of-sale] footprint, the innovative approach creating a milk replacement – not a milk alternative – with proprietary technology and processes, and the real, on-ground explosively positive customer response to the product taste and texture.”

He added: “Another factor that I personally found attractive is the company’s policy of transparency with both customers and stakeholders; this transparency includes process, ingredients, and suppliers, and it’s so customers feel safe in purchasing Eclipse products.”

The company has so far raised $60 million from investors to date, with other backers including Seth Goldman, the chairman of Beyond Meat and founder of Honest Tea, Alexis Ohanian, founder of Reddit, and Y Combinator, the world’s top tech accelerator. 

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Eclipse plans to use the new funding for the growth of its retail and food service business, accelerate its research and development and build its brand into “the world’s first true dairy replacement”. 

“Seventy percent of the world’s population is lactose intolerant and with the alternative protein space projected to grow to $1.4 trillion by 2050, Eclipse is positioned to completely transform the dairy industry with its proprietary plant-based dairy platform,” said Koichiro Nakamura, founder and general partner of Sozo Ventures.

Eclipse said it has seen its retail presence grow by 2100 percent year-on-year, as a result of partnerships with Whole Foods Market, Albertsons, Vons, and GoPuff.

KBW Ventures is headquartered in San Mateo, California, has offices in Riyadh, Dubai, Washington DC, Los Angeles and San Francisco, and invests in companies with transformative technologies and business models.

Its portfolio of investments includes the Colorado-based pet food firm Bond Pet Foods, Hawaiian-based vegan jerky company Moku Foods, US-based cellular agriculture seafood company BlueNalu, and Californian food tech company Upside Foods.