Food and beverage startups backed by tech investors are having a rough go of it this season, with Juicero all but melting down and companies like Memphis Meats, Urban Remedy and Soylent recalling products, according to required disclosures on the federal site Foodsafety.gov.
Now, Hampton Creek Foods, a packaged goods company backed by the likes of Horizons, Khosla, and AME Cloud Ventures, is in the midst of a management shakeup.
According to Bloomberg’s Olivia Zaleski Hampton Creek has dismissed its chief financial officer and human resources chief along with finance and logistics staff. The company’s COO, Dave Wengerhoff, is also leaving but will remain as an advisor. Its prior COO, Andy Rendich, left in the fall of 2016 according to his own LinkedIn profile.
The Bloomberg report also alleges Hampton Creek was burning a huge amount of money, as much as $10 million per month at one point. We reached out to multiple Hampton Creek investors, and its CEO Josh Tetrick for more information about the startup’s financial health and fundraising status. Sources were not immediately available to comment.
Hampton Creek CEO Josh Tetrick has come under fire previously for his management practices and engaging in “buybacks,” wherein the company purchased some of its own products from store shelves.
The startup makes plant-based foods designed to taste like egg-based counterparts, including mayo, dressings and different flavors of cookies and cookie dough. Its products are sold to commercial kitchens and at retailers like Target, Whole Foods and other major groceries.
One reason it has drawn the support of venture firms that normally invest in cutting-edge tech is that Hampton Creek has promised to use big data analytics to develop its formulations, and to amass a huge set of data about plant-derived proteins.
Its products gained enough traction in the US market that the startup was targeted by the American Egg Board in 2015. The USDA-affiliated organization promotes eggs using funds supplied by industry compatriots.
Instead of promoting egg commodities broadly, as it was authorized to do, the American Egg Board used its funds to show ads to people who were searching for info about Hampton Creek products online. Egg board employees also exchanged cavalier emails threatening the startup and Josh Tetrick.
Tetrick told Fortune magazine earlier this week that his startup has attained a $1.1 billion valuation, making it a “unicorn.” It has not disclosed exactly how much venture capital and possibly venture debt financing it has raised to-date.
Tetrick sent a statement to media, including TechCrunch, about the recent dismissals and new hires at his firm. He said:
“These people made us a better company while they were here. Some changes were made due to structural reasons and some changes were made due to performance reasons. Out of respect for the individuals who helped build this company, we won’t comment further.”
According to a company spokesperson, Hampton Creek employs about 140 full-time today. Despite its issues, Hampton Creek is still drawing in talent. Its incoming CFO and COO is Erez Shima, who previously worked at Stratasys, and its new CMO and revenue officer Brian Irving previously worked at Apple, Google and Airbnb, for example.