February 2, 2021

By Lynda Kiernan, Global AgInvesting Media

Animal-free protein developer Clara Foods has secured an $8 million venture loan facility from Horizon Technology Finance Corporation, a specialty financier that provides capital as secured loans to venture capital-backed companies in the life sciences, technology, healthcare information and services, and sustainable industries. Of the total commitment, $5 million has been initially funded. 

Founded in San Francisco by Arturo Elizondo and David Anchel, Clara Foods’ mission is to be a leader in the global transition to animal-free proteins. Recognizing that factory farm production of eggs is unsustainable and costly both to the environment and for meeting the demands of a growing population, Clara Foods’ initial focus is on bringing real, chicken-free eggs to market.

Clara Foods uses precision fermentation to create proprietary proteins that will meet the demands of consumers looking for alternative proteins that are created in a sustainable way – such as its molecularly identical egg proteins that have the ability to match the taste, texture, and particular culinary functionality of animal-derived eggs.

This breakthrough has brought Clara Foods to the attention of prominent investors that backed an unannounced $15 million Series A for the company led by The Production Board in 2016, and a $40 million Series B in April 2019 led by Ingredion, who was joined by a coalition of strategic industry investors, including  B37, SOSV, Hemisphere Ventures, and others. 

“Through its innovative protein platform technology, Clara Foods is making significant progress in creating a remarkable animal-free egg,” said Gerald A. Michaud, president, Horizon. “We expect its products will find a significant audience as consumers continue to increase their consumption of alternative protein sources as well as more sustainable food sources. We are pleased to support Clara Foods in bringing their animal-free proteins to a large and growing market.”

Once Clara Foods, which stated that it plans to use the funds from this secured loan for general working capital purposes, is successful at scaling up their production, it could be an attractive alternative ingredient source to companies producing pasta, condiments, confectionary products, and protein powder brands that use egg whites.

The alternative yeast-based egg whites would also eliminate the risks associated with traditional egg white production, including avian flu and salmonella, and would also quell animal welfare concerns, while maintaining the egg white’s taste and nutritional value.

“We appreciate Horizon’s support and confidence in what we are accomplishing at Clara Foods,” said Arturo Elizondo, CEO and co-founder, Clara Foods. “We are excited to bring to market sustainable, ethical and affordable alternative proteins to meet the rapidly expanding consumer demand for animal-free products that help transform our food system from the ground up. Horizon’s investment will help facilitate our go-to-market strategy and grow our business.”

– Lynda Kiernan is editor with GAI Media, and is managing editor and daily contributor for Global AgInvesting’s AgInvesting Weekly News and  Agtech Intel News, and HighQuest Group’s Oilseed & Grain News. She is also a contributor to the GAI Gazette. She can be reached at lkiernan@globalaginvesting.com.