June 15, 2020

By Lynda Kiernan, Global AgInvesting Media

Colorado-based mushroom-focused organic food tech startup MycoTechnology has raised $39 million through a “pandemic era” Series D that brings the company’s total funding to date to $120 million and sets it as one of the most highly valued food tech startups in the world. 

GAI News has been writing about MycoTechnology since its $9.2 million Series A in 2015 led by S2G Ventures and involving Middleland Capital and Seventure Partners. Since that time, the company has gone on to greatly expand its investor base without losing valuation. 

Founded in 2013 by Dr. Brooks Kelly, Jim Langan, Peter Lubar, and Alan Hahn, MycoTechnology has pioneered the development of a variety of innovative organic food processing platforms using the transformative power of mushroom roots (mycelium). Although the full range of possibilities for their technology is not yet known, the company has used their technology to solve some of the toughest challenges faced by the food and beverage industries.

Through mushroom fermentation technology, MycoTechnology’s flagship product, ClearTaste®, is the world’s first organic bitter blocker, which helps companies reduce the sugar content of their products by blocking bitterness. Additional testing has revealed that ClearTaste® is also able to block the metallic aftertaste associated with potassium chloride, a common salt replacer.  Their second product, PureTaste®, is solving how we will feed an exponentially growing population with a sustainable, functional, and nutritional plant-based protein.

The flexibility and potential of the company’s technology, particularly in connection with its success in improving the taste profile of stevia, drew the attention of investors in 2015 when MycoTechnology announced the closing of a $9.2 million Series A, which was led by led by S2G Ventures, and including Seventure Partners, and Middleland Capital.

This round was followed a year later by the closing of an oversubscribed $42 million Series B co-led by S2G, Bunge Ventures, and Emerson Collective. Other investors included in the round are Health for Life Capital; Seventure Partners; Middleland Capital; Tao Capital Partners; Kellogg’s venture fund, Eighteen94 Capital; Continental Grain; GreatPoint Ventures; Closed Loop Capital; and Windy City LLC; Ajinomoto Co. In.; and Continental Grain Company.

The $30 million raised through its Series C gave MycoTechnology the ability to explore new innovative ways to meet consumer demands through the development of new ingredients. With that capital in-hand, the company was able to expand and accelerate its R&D project execution, and further expand its team for the pursuit of current and future projects.

Today, this latest Series D was co-led by Greenleaf Foods, SPC, S2G Ventures, and Evolution Partners with participation from Rich Products Ventures, Tyson Ventures, Continental Grain, Middleland Capital, Bunge Ventures, Seventure Partners, Cibus Investments Limited, and Kellogg’s investment unit eighteen94.

“We do not innovate for the sake of innovating. We create products that solve the biggest challenges in the food industry, like creating great tasting products without excessive sugar, salt, or fat and doing so in a more sustainable way,” said Alan Hahn, CEO, MycoTechnology.

“I believe this is what attracted our investors to look closely at our company, and when they saw the many ways that mushroom fermentation can truly transform the food industry for the better, they decided to invest, even during challenging times.”

Purposeful Innovation

Continuing to focus its energy on purposeful innovation, the company plans to use the capital from this latest round to prepare for new product introductions that bring with them the potential for great change for the food industry, or never-before-seen ingredients to play. 

“As a leading producer of plant-based foods in North America, we were already experienced in the process of fermentation,” noted Dan Curtin, president, Greenleaf Foods, “…but MycoTechnology’s unique application has the potential to transform the plant-based space by unleashing new protein sources.”

“Their commitment to clean, simple ingredients, food quality and sustainability align with our values and desire to find new ways to meet changing consumer demands.”

Rich Product Ventures is another pioneer in plant-based foods that recognizes the power in the work that MycoTechnology is doing to revolutionize food production at scale, as noted by Managing Director Dinsh Guzdar who said, “As an original pioneer in plant- based, non-dairy products such as coffee creamer and whipped toppings, we understand the power of MycoTechnology’s innovative technology, which will enable food manufacturers to offer new plant-based products that meet the demands of today’s health-conscious and environmentally-aware consumers.”

“We also look forward to leveraging Myco’s unique capabilities in producing great-tasting, plant-based proteins in a scalable, cost effective manner.”

Today, the company uses a base of more than 60 types of fungi organisms to create better-for-you food products, Hahn told FoodNavigator-USA, going on to mention the company’s plans for an IPO in the second half of 2022. 

“It would allow us to control our mission,” said Hahn. “We’ll see how the environment for IPOs as we get nearer there, but we’ve got some very exciting new products in our pipeline that I think will probably trigger the right opportunity to go public.”

Fungi-Driven Functionality 

Historically, the mushroom has been overlooked by many, and even regarded with disdain by some. But recently, innovative food tech entrepreneurs have begun to unlock a myriad of ways that fungi can be acted upon to enhance the functionality of foods, and investors are noticing. 

Recent news out of Sweden announced that €1.2 million (US$1.37 million) in funding had been raised by food tech startup Mycorena, the developer of a proprietary fungi-based process to make next-generation, vegan protein with a significantly lower environmental impact compared to animal or plant-based proteins.

The funds will be used to advance the commercialization of its novel fungi-based alternative protein, Promyc.

Launched in early 2020, Promyc has a nutritional profile of 60 percent protein and 12 percent fiber, and is being positioned by the company as a more sustainable alternative to both meat and traditional plant-based proteins such as soy or pea.

“People are becoming more aware of the importance of having a healthy and sustainable food system, especially at these times when the world is facing a crisis,” said Ramkumar Nair, founder and CEO, Mycorena.

In Sweden, Mycorena’s is planning to continue to scale up production capacity with the addition of its new facility, and to pursue new potential applications for Promyc while also expanding their customer base.

– Lynda Kiernan is editor with GAI Media, and is managing editor and daily contributor for Global AgInvesting’s AgInvesting Weekly News and  Agtech Intel News, and HighQuest Group’s Oilseed & Grain News. She is also a contributor to the GAI Gazette. She can be reached at lkiernan@globalaginvesting.com.