Proterra pursues ‘Coca-Cola model’ for Asian alternative protein JV

Proterra Investment Partners has launched an Asia-focused joint venture with plant-based egg provider Just in a move that will also see it target the region’s alternative protein supply chain.

Proterra managing director Tai Lin told Agri Investor the firm’s up to $100 million investment into joint venture Eat Just Asia includes plans to establish of a unit for the procurement and origination of mung beans, which are the main feedstock of the company’s offerings.

The investment firm also plans to build a protein extraction facility, assume control of Eat Just Asia’s sales and marketing, and establish a network of contract bottlers and packagers throughout Asia.

“It is a bit of a Coca-Cola model,” Lin said, adding that former Coca-Cola board members and executives are involved in the investment and shareholder teams.

He explained that Proterra will control the board of the 50/50 joint venture, through which all of Just’s Asian business will be managed. He added that co-investors in the deal include a food and ag focused European institutional investor, a Hong Kong-managed investment group that has twice previously co-invested with Proterra in Asia and at least one high-net-worth individual.

Lin highlighted that although other leading alternative protein companies are expecting China and the broader Asian market to account for as much as 80 percent of future demand, their established presence in the region is limited.

In focusing first on building a supply chain for mung beans to make egg replacements, Lin said, Proterra is tapping into the world’s largest egg markets, where Asian consumers are already familiar with the crop as a staple food consumed similarly to potatoes.

“You are just giving existing population customers something they already know in a different application, whereas in the US it’s still a bit novel,” he said.

The crop also offers promising economics for Proterra, given that only about 20 percent of the protein from the mung beans Just currently imports from Bangladesh, Myanmar, China and India can be used in its egg replacement products, according to Lin. Though there is a very limited market in North America for the starches that make up the majority of the crop’s dead weight, he explained, the byproduct is in high demand in Asia, where Proterra plans to supply producers of popular ‘glass noodles’.

The processing facility that will allow Proterra to supply the secondary starch and fiber markets is being built in co-operation with the Singaporean government, which Lin explained sees alternative protein as an important part of a wider goal to produce 30 percent of its own food by 2030.

“We are getting very high-level support from the Singaporean government. This sector is a strategic priority for them. All of these countries now, through covid, are focused on food security and local production,” said Lin, who splits his time between Shanghai and Singapore. “Local production for local consumption is now a much more interesting theme than it has ever been.”

A source familiar with the Eat Just Asia deal told Agri Investor capital was drawn from the third iteration of Proterra’s Food Fund strategy. According to a October 21 SEC filing, Proterra Asia Food Fund 3 had raised $35.7 million from 26 LPs since the vehicle’s first sale on October 5. Agri Investor reported last year that Proterra planned to target between $700 million and $800 million for its third fund, which was to focus largely on Asia.

Just was founded as Hampton Creek in 2011 to focus on production of plant-based foods that began with mayonnaise alternatives, before its Just Egg product was introduced  in 2018. Lin highlighted the company is among a small group of alternative protein startups to have been valued at more than $1 billion by its outside investors, which have included Menlo Park, California-headquartered Khosla Ventures and Hong Kong-headquartered Horizon Ventures.