This Startup is Making Fungi-based Biomaterials to Replace Both Animal Leather and Meat

EAT

Aug 22

The former Hyundai spin-off company Mycel has raised $10 million to develop its groundbreaking mycelium biomaterial that can be used to replace animal products across various industries, including food, fashion, and cosmetics.

South Korean-based startup Mycel is developing alternatives to both animal leather and meat using its fungi-based biomaterial. Recently, the company secured $10 million in a pre-Series A funding round to commercialize its biomaterials in 2023.

Using mycelium, the vegetative, threadlike part of fungi, Mycel’s vegan bioleather can be used in car seats and luxury cosmetic products, and fashion products like shoes, clothes and bags.

A growing number of companies are also utilizing mycelium to eliminate the use of animals in the high-end and fast fashion industry. San Francisco-based startup, MycoWorks recently raised $125 million in a Series C round to build its first full-scale mushroom leather production plant for its pioneering product, Reishi. MycoWorks announced its first partnership with French design house Hermès last year, and reportedly has contracts in place with a range of other major global luxury brands. Meanwhile, Bolt Threads secured $253 million in September 2021 for its mushroom leather alternative Mylo. The innovative material has already been used by leading brands including Stella McCartney and Adidas in products such as pants, handbags, and shoes.

Mycel will use the new funding to open a production plant in South Korea to scale the manufacturing of its fungi-based biomaterials and double its headcount to 42 employees, according to the company’s co-founder and former Hyundai Motor employee, Sungjin Sah. The startup is also in discussions with global brands to co-develop mycelium-based leather products as well as cosmetics ingredients.

Korea Development Bank, Industrial Bank of Korea, Stone Bridge, We Ventures, Spring Camp, Hyundai Motor's Zero 1 Fund, also known as ZER0 1NE 2 Fund, and Industrial Bank of Korea are among the investors in Mycel's most recent fundraising round. The pre-money worth is estimated to be at $40 million, according to Sah.

Mycel is a spin-off company from Hyundai Motor’s in-house startup program, which offers employees of Hyundai Motor Company and Kia the chance to explore and commercialize innovative ideas in mobility, auto components, software, and IT services.

Founded in 2020 by former Hyundai Motor employees Sah, Sungwon Kim (COO) and Yunggon Park (CSO), the startups mission is “to stimulate the diverse imaginations of our customers through our technology, and together with our customers, make a huge move towards the transition to a sustainable renewable system,” according to its website.

While most fungi leather startups are focusing purely on the fashion industry, Mycel is diversifying its portfolio to also offer a mycelium-based animal protein alternative. According to the company, mycelium has a morphological characteristic similar to that of animal muscle, so it has the advantage of mimicking the fiber structure of a muscle, unlike other alternative protein materials. In addition, mycelium is low in fat and is rich in protein and dietary fiber, so they have high nutritional value.

Fungi-based meat alternatives are growing in popularity as a more ethical and sustainable protein choice. A recent study revealed that replacing just 20 percent of beef with fungi-based meat alternatives by 2050 could slash deforestation in half. When compared to beef from animals, Myco-protein has a carbon footprint of roughly 3 percent and a water impact of less than 1 percent. The same amount of protein can also be produced with less than 4 percent of land use, states Mycel.

“As the population grows to 9.2 billion in 2050, meat consumption is projected to increase from 3.04 million tons in 2018 to 4.55 million tons,” said Sa. “In the end, I think the market that replaces meat has no choice but to grow.”

Learn more about the companies and innovators disrupting the food system with our Future of Food podcast episodes here.

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