MycoTechnology raises $85m in series E to expand mycelium-fueled platform

By Elaine Watson contact

- Last updated on GMT

Image credit: MycoTechnology
Image credit: MycoTechnology

Related tags: MycoTechnology, mycelium, Cordyceps, mushrooms, medicinal mushrooms

Colorado-based MycoTechnology – which is building a functional ingredients platform utilizing mycelium, the filament-like roots of mushrooms - has raised $85m in a series E* round (taking its total funding to $200m) that will help it expand its portfolio and increase its presence in Europe, Asia, and the Middle East.

MycoTechnology​​ ​​has multiple projects in the R&D pipeline, but has so far commercialized three platforms: ClearIQ​​​ bitter blocking and flavor modulating ingredients; FermentIQ fermented​​ ​​plant-based protein; and EvolveIQ cordyceps mushroom adaptogens.

It has also launched a consumer brand called Goodside Foods​ selling shelf-stable meat alternatives and developed plant-based cheeses utilizing its proprietary technology that it claims deliver superior melting and stretching properties.

EvolveIQ: Cordyceps Sinensis​ powder  ​

MycoTech's latest innovation, EvolveIQ​, taps into growing interest in Cordyceps, a medicinal mushroom used in traditional Chinese and Tibetan medicine that is gaining traction in the US buoyed by interest in adaptogens and immunity, said CEO Alan Hahn.   

MycoTech's Cordyceps Sinensis​ mycelium is grown in stainless steel fermentation tanks and fed liquid nutrients, rather than in a solid-state process using cereal grains (the latter approach typically delivers a final product that contains more of the substrate than the target bioactive, claimed Hahn: “You get 97% sorghum or rice, not Cordyceps").

As MycoTech's Cordyceps is not grown in soil, meanwhile, "This also means we don’thave any of the things organisms naturally pull out the ground such as heavy metals or pesticides,"​ he added.

To those arguing that all the good stuff in mushrooms is in the fruiting body, not the mycelium, he said: “I think there's mixed opinions about that, but it doesn’t make sense to me that mycelia and the fruiting body are totally different organisms.

“The inside of that mushroom​ [fruiting part] is basically all mycelia, then it's got an outside skin, and then it's got some additional compounds that are that are going to be used to create the spores, so to me, there's not much difference.”

FermentIQ protein 

The company's FermentIQ protein - which can be used in multiple applications from snacks, baked goods and protein beverages to meat and dairy alternatives - can be supplied as a spray-dried powder, as a protein crisp for products such as bars, or as a texturized product.

While there are now several companies selling fungi ingredients targeting the alt-meat space (The Protein Brewery, Enough Foods, Meati Foods, Nature's Fynd, The Better Meat Co, MyForest Foods etc), MycoTech is using fungi to transform plant-based proteins such as pea and rice.

To make FermentIQ - which 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' - 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.  

“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 Hahn.

Fermenting pea and rice proteins with mushroom mycelium also reduces off tastes and aromas from pea and rice protein, improves their solubility (which improves texture, dispersibility, and stability in suspension) reduces chalkiness and grittiness, and boosts their oil- and water-holding capacity, claimed Hahn.

The extruded (texturized) version of FermentIQ, meanwhile, delivers improved taste and greater oil and water-holding capacity in plant-based meat products compared with 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​​.  

Plant-based cheese

When it comes to plant-based dairy products, getting the right mouthfeel for FermentIQ had initially been a challenge, said Hahn. "When we put it into dairy, it didn't have the mouthfeel we were looking for because the rice - no matter how much we micronized it - wasn't smooth enough, so we tried fermenting just the pea protein, and we were really surprised by the functionality we got in cheese, because the fermentation helped with stretch and melt.

"I can't say we understand the mechanism of action, but it improves the oil and water holding capacity. If you see a lot of plant-based cheeses, when you heat them, they don’t exactly melt, they kind of sweat. Ours melts like real cheese. So we have an American cheese, and now we're working on a Cheddar and Mozzarella.

“We’ve found a co-manufacturer to make it for us, and now we're about to launch that product so people can private label it, so they don't have to figure out how to formulate it themselves."

ClearIQ: Blocking off notes in chocolate, CBD, stevia-sweetened beverages​

ClearIQ​​​ – MycoTech’s FEMA GRAS ingredient that’s typically labeled as ‘natural flavor’ in the US - has "taken off like crazy​," claimed Hahn, who said it can be used to mask metallic, bitter, sour, astringent, and general off-notes 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. 

International expansion plans

The latest round of funding will help MycoTech take its wares to a wider global audience, explained Hahn, who said the firm has an exciting pipeline of products deploying its proprietary technology.

“We've been slowly expanding internationally. We’re going to be opening an office in Singapore for sales and applications, and we’re working with a co-manufacturer who will texturize our protein powder. We’re also negotiating to have a ​[production] facility in southeast Asia.

“Then for Europe, we’re figuring out which country to​ [set up in], and we also plan to have a presence in the Middle East with a facility. The process is first setting up sales and applications, then co-manufacturing, and then ultimately ​[our own] facilities.”

* Participants in the round – led by a group affiliated with sovereign wealth fund the Oman Investment Authority (OIA) – include Nourish Ventures (Griffith Foods’ venture capital group), Rage Capital, Alphacy Investment, Siddhi Capital, S2G Ventures, Tyson Ventures, Continental Grain Company, Bunge Ventures, Maple Leaf Foods, Evolution VC Partners, and Gaingels.

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