Myceliuma South Korean startup making fungus-based biomaterials that can replace skin and meat said it has raised $10 million (WON13 billion) in a pre-Series A funding round.
Mycel co-founder and CEO Sungjin Sah told TechCrunch that the company is using mycelium, the root-like structure of a mushroom, to make leather substitutes that can be used in car seats and luxury cosmetics, as well as fashion products like shoes , clothes and bags . Mycel is in talks with global cosmetic brands to jointly develop mycelium-based skin products as well as cosmetic ingredients, Sah said, adding that it aims to commercialize its mushroom skin in 2023.
The Seoul-based startup will use this new funding to open a manufacturing plant in South Korea to scale production of its fungus-based biomaterials and double its headcount to 42 employees, Sah said in an interview with TechCrunch. The company, spun off from Hyundai Motor’s internal startup program, was founded in 2020 by former Hyundai Motor employees Sah, Sungwon Kim (COO) and Yunggon Park (CSO).
Mycel is not the only company that uses mycelium to produce leather. There are at least eight companies worldwide that use mycelium to produce leather the 2021 Materials Innovation Initiative report. These innovators of mycelium-based materials have attracted investors to increase the production of leather derived from fungi and plants. A San Francisco-based startup called MycoWorks raised $125 million in a Serie C round earlier this year, while Bolt Threads also secured $253 million at a valuation of 1.15 billion in September 2021. Ecovative Design too closed $60 million in March 2021
Investors in Mycel’s latest funding round include Korea Development Bank, Industrial Bank of Korea, Hyundai Motor’s Zero 1 Fund, aka ZER0 1NE 2 Fund, Stone Bridge, We Ventures and Spring Camp. Its pre-money valuation is approximately $40 million (WON50 billion), according to Sah.
The global wholesale market for next-generation fabrics to replace leather, silk, down, wool, fur and exotic skins with plant-derived, microbial, mycelial, recycled and other sustainable materials is expected to reach approximately $2.2 billion by 2026.
A number of fashion brands are looking for next-generation materials to partner with, according to the 2021 MII report. In July, global luxury brand Stella McCartney, which has been working with Bolt Threads since 2017. released a limited edition of 100 mushroom-derived leather bags. Furthermore, Hermes collaborates with MycoWorks to make a handbag using leather extracted from mushrooms.
Mycel also competes in the alternative protein space with mushroom-based food developers such as Mycorena and Quorn.
On the mushroom skin, Mycel is developing a fungus-based biomaterial that can be used as an alternative protein to interrupt the meat sector – this biomaterial, which is different from the Mycel mycelium in the skin, is a fungus, but technically not a mushroom, Sah clarified. Back in 2020, the startup tried to target its core product of biomaterials for alternative protein, which experienced a boom in early 2020 in South Korea. But now the company is developing biomaterials for both mushroom-based skin substitutes and alternative proteins, Sah explained.
The company aims to enter Singapore with its mushroom-based biomaterial to be used in alternative proteins as early as next year, Sah noted.