Science & Tech

Insiders Say Eat Just Is in Big Financial Trouble-TGN

Popular vegan egg and lab-grown-meat company Eat Just is in deep financial trouble. A WIRED investigation bringing together court records, documents, and interviews from former employees suggests that the company frequently struggled with paying its suppliers on time. Now it is being sued by a former partner for roughly $100 million and faces lawsuits from other vendors, some of which are reported here for the first time.

“The biggest issue was absolute financial mismanagement,” one former senior Eat Just employee alleges. Multiple former employees claim that the practice of delaying or withholding payment to vendors was “entrenched” and “endemic” at the company. “We had vendors we were six months behind on. We were constantly having to beg and plead to get our product out of refrigeration and into stores,” says another former senior employee. WIRED has agreed to withhold their names because they were not authorized to speak to the press.

Eat Just is one of the leading startups to have come out of the boom in plant-based alternatives to animal products. Since 2011 the startup has raised around $850 million—making it among the best-funded startups in the industry. Its vegan eggs are sold in thousands of stores in the US, and in 2020 it became the first company to sell cultivated meat to customers. In May 2022, a wholly owned Eat Just subsidiary called Good Meat announced it had signed an agreement to build 10 giant bioreactors to grow animal cells for cultivated meat—a project orders of magnitude larger than anything attempted before.

A WIRED investigation can reveal that even as the company embarked on the nine-figure bioreactor project, there were concerns it was struggling to pay vendors and contractors. Ultimately the Good Meat deal would collapse into a legal dispute, with bioreactor firm ABEC alleging that the company owes more than $61 million in unpaid invoices. The startup is also being sued in two separate recently-filed legal disputes. One from an engineering firm for more than $4.2 million for alleged unpaid work and another from a food processing firm alleging more than $450,000 in unpaid invoices for ingredients.

Eat Just, which has backing from the Qatar Investment Authority, hedge fund manager UBS O’Connor, and Charlesbank Capital Partners, is now facing a series of legal cases that could threaten to overwhelm the company. Former employees paint a picture of a Silicon Valley unicorn led by a charismatic CEO, Josh Tetrick, who managed to bring in swathes of venture capital. But all the while, as one former senior employee claims, the company was failing “drastically’ to manage its finances.

Big Promises

Eat Just is no stranger to legal battles. In addition to the lawsuits already mentioned, court records show the company has been sued on at least seven other occasions since 2019. In most of these cases the sums involved were relatively small. One lawsuit filed by food processor Archer Daniels Midland in July 2020 alleged that Eat Just failed to pay a bill of $15,640 for shelled hemp seed and shipping. In early 2021, the laboratory equipment firm VWR International sued Eat Just for $189,244. In March 2021, Eat Just’s landlord sued for nearly $2.6 million in unpaid rent. A month later, FedEx sued the company for more than $72,000. Eat Just’s head of communications, Carrie Kabat, says that all these lawsuits have been settled.

Former Eat Just employees allege these nonpayment lawsuits were the result of the company running up large bills while it waited to land new funding rounds. “It was a pervasive mindset that we could always raise more money, and even if we didn’t have money in the bank, we could push forward on different initiatives,” says one former senior employee. Another former employee says it was common for the company to rack up large debts between funding rounds. “It was a house of cards, and as long as the investor money was coming in, it was fine,” alleges a third employee.

As Eat Just moved into the business of cultivated meat—growing meat from animal cells without requiring the slaughter of animals—it started to commit to more ambitious projects. In December 2020, Eat Just’s cultivated meat was approved by Singaporean regulators—the first approval of its kind in the world. Shortly after, its meat—in the form of chicken nuggets, chicken curry and other dishes—was sold at a restaurant in one of the city-state’s five star hotels. In mid-2021, Eat Just created a wholly owned subsidiary called Good Meat to focus on cultivated meat. Until June 2023, when Upside Foods was also cleared to sell cultivated meat in the US, Good Meat was the only company selling lab-grown meat to the public anywhere in the world.

Got a Tip?

Former employees claim that the pressure to achieve industry firsts led to poor financial planning. “The desire to be first in everything drove decisions,” says one employee. In May 2022, Good Meat publicly announced its biggest project yet: It would work with the bioreactor firm ABEC to design and build as many as 10 large bioreactors, each with a capacity of 250,000 liters. In an industry where most companies are using bioreactors that hold just hundreds or thousands of liters, the size of the project was unprecedented.

ABEC’s amended legal complaint, filed in US federal court in August 2023, alleges that the project was estimated to cost Good Meat more than $1 billion to complete. ABEC claims in the lawsuit that it stood to bring in more than $550 million for its work. But by the end of 2022, Eat Just was failing to make timely payments, the complaint alleges. By March 2023 ABEC claimed over $61 million in unpaid invoices. In total, ABEC is suing for more than $100 million, which includes unpaid invoices as well as payments for changes to the scope of the bioreactor work.

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