After Rapid Growth, Eclipse Raises $40M for Alt-Milk Platform

Plant-based dairy brand Eclipse Foods has raised $40 million, the company announced today, and has set its sights on expanding beyond the freezer case.

The latest round was led by Sozo Ventures, with participation from LGBTQIA+/Allies investment syndicate Gaingels and KBW Ventures, as well as existing investors Initialized Capital and Forerunner Ventures. Eclipse has raised just over $60 million to-date, with prior investors also including Beyond Meat chairman Seth Goldman, Prince Khaled bin Alwaleed of Saudi Arabia and accelerator Y Combinator.

Launched in early 2019, Eclipse initially sold its soft-serve and hard pack ice cream to foodservice accounts, while generating consumer awareness through partnerships with celebrity chefs. However, after the COVID-19 pandemic began, the company shifted toward retail sales for its pints.

“I think [our investors] invest in the size of the vision, more than how to get there, and so it’s folks who understand both the risk and opportunity,” CEO and co-founder Aylon Steinhart said.”

The capital will be used to help advance distribution and fuel expansion into Asia, a market that Steinhart said is composed of 90% lactose-intolerant consumers. The brand has also renewed its focus on foodservice, announcing a new partnership with Smashburger for a plant-based milkshake last week.

Eclipse currently offers six flavors of plant-based ice cream pints, at retailers including Whole Foods Market, Albertsons, Vons, Safeway and GoPuff as well as a soft-serve mix and three-gallon tubs for restaurants.

“It’s doing exceptionally well in Whole Foods, but it’s also doing exceptionally well in Albertsons, which is a very different consumer,” Steinhart said. “To us it is really encouraging that the mainstream consumers are adopting these products as well.”

Rather than using lab-created ingredients, such as animal-free dairy company Perfect Day, or plant-based ingredients that mimic milk on a cellular level, like NotCo, Eclipse instead utilizes existing, easy to source plants such as cassava and corn that, when combined, mimic the taste and texture of the dairy products, said Steinhart.

Ice cream has been awash with new plant-based options over the past several years from names like Coolhaus, Brave Robot, Graeters, Oatly, Forager and Van Leeuwen, as well as private label offerings. But unlike many of the aforementioned brands, Steinhart said Eclipse has bigger plans to expand into the broader $500 billion dollar dairy market.

That ambition, Steinhart said, is what attracted investor interest. In 2023 Eclipse will launch a product line that will be in a new temperature state and section of the store.

Another key differentiator, Steinhart added, is that Eclipse does not require specialized machinery to create core ingredients or to produce finished products, which allows the company to develop items that can run on existing production lines and be mixed by any copacker.

“We don’t need tons of really expensive custom equipment, we don’t need tons of super complicated and expensive processes that don’t exist today,” he said. “What that allows us to do is scale really quickly and really efficiently…the fact that we’re able to use a mechanical process, one that runs on dairy lines and one that uses inexpensive ingredients, means that we can actually compete with commodity dairy, while maintaining healthy margins.”

That production model has drawn interest from other CPG brands interested in partnering with Eclipse, but Steinhart said the company is largely focused on building out its own product lines.

“People talk about the ‘Intel Inside’ model…[but] first it’s important that you become Intel, that you create products that people understand the differentiation and really, really care about,” he said. “In the end that makes the value of your ‘Intel,’ the value of your brand, that much higher.”