MycoTechnology raises $39m in Series D to expand functional ingredients platform

By Elaine Watson contact

- Last updated on GMT

MycoTechnology raises $39m in Series D to expand functional ingredients platform

Related tags: Cbd, Stevia, MycoTechnology, mushroom mycelia, plant-based dairy, plant-based meat

MycoTechnology – which is building a functional ingredients platform utilizing mycelia, the filament-like roots of mushrooms - has raised $39m in a series D financing round from investors* including plant-based meat specialist Greenleaf Foods to Tyson Ventures and Kellogg’s Eighteen94 Capital, taking its total funding to $120m.

While raising money during a pandemic is not for the faint-hearted, MycoTech “didn’t take a valuation hit​,” CEO Alan Hahn told FoodNavigator-USA.

“We’re not just selling a product, we’re selling a platform. We have a platform that can produce all kinds of better-for-you products and we’ve got over 60 different fungi organisms we can use,”​ added Hahn, who says he is still aiming to take the company public via an IPO in the second half of 2022.

It would allow us to control our mission​,” he explained. “We’ll see how the environment is 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.”

Colorado-based MycoTechnology​​ ​​has multiple projects in the R&D pipeline, but is best-known for its ClearTaste​​​ bitter blocking ingredient and PureTaste​​ ​​plant-based protein, which are both gaining traction in the marketplace, according to Hahn.

Complete protein ideal for plant-based meat and dairy alternatives

To make PureTaste protein, MycoTechnology uses naturally occurring mycelia from an heirloom variety of Shiitake mushroom that converts feedstock containing pea and rice protein into a complete vegan protein with a PDCAAS score of 1.00 and 77% protein by dry weight. It can be supplied as a powder, as a protein crisp for products such as bars, or as a texturized product for meat alternatives.

OZO grounds
Meat giant JBS is making a big push into the plant-based meat arena this year via a new subsidiary – Boulder, CO-based Planterra Foods – which uses MycoTechnology’s pea and rice protein fermented by Shiitake mycelia

The spray dried powder can be used in everything from plant-based milks and yogurts to baked goods, cereals and processed meats and has been listed on food labels as 'Shiitake Fermented Pea and Rice Protein,’ 'Fermented Pea and Rice Protein,' and ‘pea and rice protein fermented by shiitake mycelia.’

The extruded (texturized) version of PureTaste delivers improved taste and greater oil and water-holding capacity in plant-based meat products (vs other extruded plant proteins), enabling firms to create juicier burgers and save money, claimed Hahn, who has struck deals with a variety of brands to include the ingredient including JBS Foods subsidiary Planterra Foods​.   

Silky smooth dairy alternatives

When it comes to plant-based dairy products, getting the right mouthfeel for PureTaste had initially been a challenge, said Hahn. However, a wet milling process – post fermentation but pre-drying – had reduced the particle size and enabled the creation of smoother, silkier products.

mushroom diagram-Shane Mulholland-forestorganics68
Picture: Shane Mulholland-forestorganics68

The improvement is incredible, whether you’re looking at ice cream, puddings, milks and yogurts.”

Blocking the bitter notes in chocolate, CBD, stevia-sweetened beverages

ClearTaste​​​ – MycoTech’s FEMA GRAS ingredient that’s typically labeled as ‘natural flavor’ in the US - can be used to mask the bitter aftertaste associated with a raft of ingredients from high intensity sweeteners, to CBD, plant proteins, potassium chloride, coffee, and chocolate, in some cases enabling companies to make significant sugar reductions, claimed Hahn.

“The #1 application has been in beverages with stevia to get rid of the metallic aftertaste, but we’re also seeing a lot of interest in using it with CBD beverages and edibles​.”

The innovation pipeline: Cordyceps sinensis​ powder to launch this month

As for the innovation pipeline, multiple projects are on the go, one of which focuses on cordyceps sinensis, ​a medicinal mushroom used in traditional Chinese and Tibetan medicine linked to multiple benefits including supporting the immune system​, which has attracted a lot of interest in recent weeks, said Hahn.

There’s been a lot of interest in lion’s mane, reishi, cordyceps, and chaga, so we created a project to develop the purest form of cordyceps sinensis we believe has ever been produced, and interest has been off the charts, so we’ll be launching this next week in a powdered form ​[as a b2b ingredient].

“It’s a strain of cordyceps sinsensis that has virtually disappeared and there’s no one producing it commercially. All the tanks we built for PureTaste work really well with this type of fungi.”

*The Series D funding round 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 eighteen94 Capital investment arm.  

PureTaste-protein comparison

PureTaste Protein​​ is derived from the fermentation of plant based protein feedstock with the mycelia (roots) of Shiitake mushroom (Lentinula edodes​​​​) in an aqueous environment.  

When sufficient quantities of protein have been manufactured – the process takes 48 hours from culture to harvest - the whole mixture is harvested and then spray-dried into a fine, neutral colored and tasting powder with 77% protein that’s low in calories, fat and carbohydrates, and packed with vitamins and minerals that cannot be found in other competitive proteins, claims MycoTechnology.

The protein – which is free from the ‘big 8’ allergens - has all nine essential and 11 non-essential amino acids.  It also contains vitamin B12, a nutrient sought after by vegans and vegetarians.

“The mycelium excrete enzymes and metabolites that break down the pea and rice protein strands and make them more bioavailable so your body can digest the amino acids,” ​​​explained MycoTech CEO Alan Hahn.

Combining pea and rice proteins creates a balanced amino acid profile, while fermenting them with mushroom mycelium reduces their off tastes and aromas, improves their solubility (which improves texture, dispersibility, and stability in suspension) reduces chalkiness and grittiness, and boosts their oil- and water-holding capacity, added Hahn.

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