Mushrooms: the ultimate sustainable material?
The fungi kingdom is best known for the hundreds of edible mushrooms beloved by chefs, gourmands and everyday shovelers of pizza and pasta. They also hold magical medical qualities for boosting immune systems, helping people as antioxidants and anti-inflammatories and for increasing brain health or even boosting energy and stamina. Less well understood is that fungi covers millions of species — not just mushrooms, but yeasts, rusts, smuts, mildews and molds.
Now fungi are quickly becoming a mainstay of startup innovation, not just as food sources, but also for an amazing array of promising applications in textiles, packaging, interior design and even, at the outer edges, beyond our stricter definition, could arguably include biomass energy production. Products based on mycelium, the vegetative part of any fungus, are biodegradable, with a growing role in transforming the world to a sustainable economy.
Dealroom.co, working with Leonardo Massa of Progress Tech Transfer Fund, has unearthed more than 80 active startups working using mycelium technology. We classify them into different verticals below:
The potential and versatility of mycelium production make fungal bio-based materials a complete food ingredient or sustainable alternative material to replace everything from meat to leather to construction and food from agricultural waste streams. Inconspicuous but widely abundant, fungi are indispensable to terrestrial ecosystems as nature’s decomposers, converting organic matter, including petroleum and some pesticides, into inorganic matter that can be consumed by plants and animals.
Through the rise of mycelium engineering and the spread of mycelium factories, fungi startups have the opportunity to contribute to solving at least 10 out of 17 United Nations Sustainable Development Goals. At present, startups are making a tangible impact in three big industries: Food and Beverage, Fashion and Materials.
A pioneer in the field has been Ecovative, which has specialized in mycelium packaging to replace plastics and wood. It has given rise to Atlast Food, makers of mycelium bacon. In Europe, a pioneering company has been Mogu, mycelium material for design, that also has business units to deal with mycelium “unleather” as well as “alt protein” which it has dubbed mycoprotein.
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The Fungi Startup kingdom is picking up momentum with venture funders seeking sustainable products to reduce the human footprint.
The landscape analysis shown in Figure 1 includes fungi startups that have raised more than 1 billion euros globally over the last four years, with 10% of that total going into European startups. Venture capital investment in 2021 YTD presents two-thirds of that total and is 16 times greater than in 2015.
The food sector attracts 60% of the fungi startups now operating. The amount of capital raised by this segment has reached €832 million (2015 to 2021 YTD combined).
Food-related mycelium investment
Year to date in 2021, €651 million was raised, 2.7 times more than the €233 million invested during 2020. Beyond food or medical uses, these trends are underpinned by increasing demand for “green” materials and sustainable processes.
The vast majority of the investment is directed towards North American firms, with European startups gaining a bit more traction only in the past two years.
The pioneering European startups tackling these sectors are:
- 🏴 Enough: Produces mycoprotein – a complete food ingredient containing all essential amino acids as well as being high in dietary fiber and can be made into alternative/vegan meat, seafood, and dairy products. Founded in Glasgow, Scotland in 2015.
- 🇮🇹 MOGU. Mycelium factory working on construction materials, mycelium leather, and food from agricultural waste streams. Founded in Milan, Italy, in 2015.
- 🇬🇧 Biohm manufactures bio-based construction materials from food waste. Founded in 2016 in London, UK.
- 🇸🇪 Mycornea. Making sustainable fungi-based protein, while reducing waste and water usage in the food industry. Founded in Göteborg, Sweden, in 2017.
- 🇩🇪MushLabs. Mushlabs cultivates mycelial biomass in large fermenters for food applications. Founded in Berlin, Germany, in 2018.
- 🇳🇱The Protein Brewery B.V. supplements the market for protein alternatives by fungal protein. Founded in 2019, Breda, Netherlands.