How this 42-year-old CEO went from $3,000 in savings to creating a $1.2 billion food startup

How I raised $700 million to develop a vegan egg for my food startup
How I raised $700 million to develop a vegan egg for my food startup

Josh Tetrick wanted to learn how to scramble a plant like an egg. It took him six years and up to $4 million to accomplish it.

That's the level of dedication behind Just Egg, the hallmark product of Tetrick's $1.2 billion startup Eat Just. The plant-based egg substitute is made from mung beans, comes in a squirt bottle and can be scrambled in a frying pan just like a chicken's egg.

But it's more than a scientific accomplishment or an advancement in food tech. Just Egg may have saved Tetrick's company – and perhaps, even the 42-year-old's entrepreneurial future.

When Tetrick and his best friend Josh Balk co-founded Eat Just in 2011, the company was known as Beyond Eggs. It later became Hampton Creek Foods, and released a popular egg-free "mayonnaise" called Just Mayo that drew a lawsuit from Unilever and extreme pressure from the egg industry. Hampton Creek also endured multiple scandals, and in 2017, the company's entire board resigned over disagreements with Tetrick about the startup's future.

All along, Tetrick was trying and failing to develop Just Egg. "I thought it would take us about a year-and-a-half to find something that scrambled like an egg," Tetrick tells CNBC Make It. "And it really wasn't until four or five years later where we were able to really nail ... that texture of an egg in the pan. [Even then] it still tasted very beany."

Right around the resignation of Eat Just's board, food scientists finally cracked the code. The company began selling Just Egg to restaurants in 2017, with national retail stores following in 2019, and now says it has sold the equivalent of 250 million chicken eggs while raising more than $800 million in funding from investors including Bill Gates, Marc Benioff, and Microsoft co-founder Paul Allen's Vulcan Capital.

Tetrick says he's not interested in resting on those laurels. Here's how he built a billion-dollar startup pitching plant-based egg substitutes from scratch – and where he wants to go next.

From Just Mayo to Eat Just

After graduating from the University of West Virginia, where he played football, Tetrick spent several years in sub-Saharan Africa working with children for social impact nonprofits. He read a lot, and found one book particularly inspirational: "The Fortune at the Bottom of the Pyramid" by C. K. Prahalad, which focuses on the idea that capitalism, in the form of for-profit companies, can create positive social change.

He brought that idea to Balk, a childhood friend and vice president at The Humane Society, who convinced Tetrick that they should seek an alternative to chicken-laid eggs. They reasoned that it could disrupt a global agricultural industry that produces greenhouse gases and has faced accusations of hen abuse.

Tetrick says he started out with just $3,000 in his bank account. By the end of 2011, the co-founders had scored $500,000 in seed funding from Khosla Ventures by promising a product that would be better tasting, more cost effective and kinder to animals than chicken eggs.

They used that money to hire experts and scientists. Biochemists identified different types of plants – from beans to grains and other vegetables – with similar protein and fat content to eggs. Engineers figured out "a way to pull the protein from the bean or from the grain," Tetrick says. And chefs tinkered with the elements that tickle your taste buds.

Soon, the company released multiple products with plant-based egg substitutes. One, Just Mayo, became Whole Foods' top-selling mayo product in 2014. The company garnered acclaim, making CNBC's Disruptor 50 list and drawing praise from Bill Gates, who called it the "future of food."

The success made the company a target for the traditional egg industry. In 2014, Unilever – which produces Hellman's mayonnaise – sued Eat Just for false advertising over the product name "Just Mayo," arguing that mayonnaise contained eggs by its very definition. (The lawsuit was dropped within months.)

Two years later, the USDA chided the American Egg Board for launching a covert PR campaign meant to thwart Eat Just's progress. The company also dealt with accusations of inflating sales, which Tetrick denied, and food safety issues that led to Target pulling its products from shelves. (The company says the FDA cleared its products of any health concerns.)

Ultimately, the company's entire board resigned. "It was a rough time," Tetrick says. "[But] we got to essentially start how we're doing this over."

Back in the frying pan and beyond

All along, Tetrick wanted to follow through on plant-based scrambled eggs. By roughly 2015, his team had figured out how to turn mung beans into a light-yellow liquid that could congeal when cooked, like a scrambled egg. But the taste wasn't right, and creating it in a lab was easier than manufacturing it at scale.

It took two more years for the team to figure it out. Arguably, their success saved the company: With Just Egg, the company is back in Target, not to mention Kroger, Walmart, Albertsons, Safeway and other retailers that put the product in more than 17,000 stores nationwide. Eat Just says Just Egg has made it into two million U.S. households since launching at the end of 2017.

The company says Just Egg is not just better for you, but also the planet. It has no cholesterol and less saturated fat than poultry eggs. The company says it uses 98% less water and emits 93% less carbon dioxide to make the equivalent of a single chicken's egg, too.

"We'd get pumped," Tetrick says. "I mean, one of the most important moments in the history of the company was the first time a plant scrambled."

Last year, the company raised an additional $200 million from the state-backed Qatar Investment Authority, and Eat Just's most recent valuation is $1.2 billion, according to Pitchbook. Eat Just also has regulatory approval in Singapore for cell-cultured (or lab-grown) meat, and Tetrick is hoping for similar approval in the U.S. as soon as next year for a product line called "Good Meat."

That means stiff competition from the alternative meats market, which is expected to grow to $140 billion by the end of this decade. Tetrick says any amount of pressure or challenge is worth it: Some research shows that switching to lab-grown meat could significantly reduce the agricultural industry's greenhouse gas emissions and use of natural resources, like land and water.

Additional research has also projected that the energy required for large-scale production of lab-grown meats could end up having a negative environmental impact. Still, Tetrick seems undeterred.

"Don't sleep on Good Meat," he says.

CLARIFICATION: This article has been updated to show that Eat Just began selling Just Egg in restaurants as early as 2017 and national retail distribution followed in 2019.

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