Asian Investors Back Mushlabs In US$10M Round To Scale-Up Mushroom-Based Alt Protein

Biotech startup Mushlabs has recently raised US$10 million in a Series A funding round for its mushroom-fermentation technology. The financing round was led by Singapore’s VisVires New Protein and Switzerland’s Redalpine, with participation from existing investors including Hong Kong-based Happiness Capital. 

Germany-based startup Mushlabs, who was part of ProVeg Incubator, has secured a US$10 million Series A round, which was co-led by VisVires New Protein, the division under Singapore’s VisVires Capital, and European startup investor Redalpine. The round also saw financing from Happiness Capital, an affiliate of Hong Kong’s established food brand Lee Kum Kee, as well as San Francisco-based Joyance Partners. 

It marks VisVires New Protein’s maiden investment out of the fund, an indicator of the potential Asia-focused expansion strategy that Mushlabs is eyeing in the future. 

The latest capital injection brings Mushlab’s total funding to date to US$12.2 million, and the startup plans to use the financing to ramp up its production and B2B distribution. 

Founded in 2018, Mushlabs uses liquid fermentation technology to grow mycelia, known as the “root” of the mushroom, which can be used as an ingredient to manufacture sustainable alternative proteins and meat substitutes. According to the Berlin-based biotech firm, the mycelia is cultivated in a controlled environment and fed with byproducts from other industrial and agricultural processes, such as rice husks, coffee grounds and sugarcane. 

The mycelia cells then ferment the side stream byproducts to grow the protein-rich ingredient suitable to make meat alternatives due to its umami flavour profile and mouthfeel. 

This process of manufacturing mycelia using byproducts from the agri-food industry, according to the startup, is a double-whammy when it comes to sustainability. It is a “highly circular process” that uses less water and land, and can also offer the advantages of mobile industrial alternative protein production – a particularly attractive and viable food solution for regions experiencing acute food shortages and crises. 

Amid the coronavirus pandemic, which has exposed the vulnerabilities of the global meat supply chain, new sustainable proteins also represent safer and more crisis-resilient food solutions. 

Mushlabs has not disclosed what materials it currently uses as its side stream to feed the mycelia, but founder and CEO Mazen Rizk revealed in an interview with AgFunder that it includes a “wide range of leftovers from farming, foodservice, food processing, and other agrifood segments.” 

A number of food techs and startups are currently harnessing mushroom fermentation to create more sustainable and crisis-resilient food solutions. In July, Colorado-based food tech Meati Foods announced it will soon roll out its vegan-friendly fungi-based steaks to consumers.

Meanwhile, another Colorado-based startup, MycoTechnology, which recently raised a US$39 Series D funding round for its mycelia-based functional plant-based ingredients platform, which includes ClearTaste, a bitterness blocking ingredient to improve the taste of plant proteins, and PureTaste, a mycelium-fermented pea and rice vegan protein.

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