- Chinova Bioworks, a manufacturer of a natural preservative made from white button mushrooms, has closed a $6 million series A funding round. DSM Venturing and Rhapsody Venture Partners co-led the round, while Rich Products Ventures also participated.
- The company plans to use the investment to launch new products, hire employees and expand production at its facility on Prince Edward Island in Canada.
- With this latest funding round, Chinova has raised $10 million to date, according to the company. The clean-label ingredient manufacturer is benefitting from growing consumer interest in natural ingredients and concerns about the side effects of artificial preservatives.
Chinova Bioworks has a proprietary technology to extract the dietary fiber chitosan from the discarded stems of white button mushrooms. The process involves drying and grinding the fungi, and “purifying out” the fiber with heat and water. The result is a vegan, non-GMO, Kosher, Halal and allergen-free ingredient the company calls Chiber that executives say is at least as effective as synthetic preservatives.
The latest funding round for Chinova underlines the massive potential of natural preservatives. According to research from the International Food Information Council (IFIC), almost two-thirds of consumers say they try to choose foods made from clean ingredients, while roughly half avoid artificial preservatives, sweeteners, colors and flavors at least some of the time.
“The pandemic has accelerated the trend for food safety and health-focused products,'' Natasha Dhayagude, co-founder and CEO of Chinova Bioworks, said in a statement. “With this increased consumer awareness and scrutiny, brands are under pressure to keep up and reformulate their products to meet clean-label demands. Departing from artificial preservatives is one of the most critical and challenging changes food producers must make.”
Rich Products is a first-time investor in Chinova through its corporate venture arm. It has a portfolio of consumer brands such as Farm Rich frozen appetizers and Carvel ice cream cakes, as well as wholesale products like frozen doughs, crusts and baked goods.
Rich Products, which has more than 650 products such as pizzas and desserts that meet its clean-label guidelines, also is a customer of Chinova.
“Their guidance with Chiber sampling, product formulation and testing helped streamline the product development process,” said Alberto Roca, the head of Latin America R&D for Rich Products. “It was easy to switch to using Chiber as a natural preservative to garner the clean-label benefits.”
Chiber also has a sustainability halo. Chinova said it collects the mushroom stems that supply the chitosan from farmers who would otherwise discard them, preventing food waste.
Preservation is not Chinova’s only application for Chiber. The company also has explored using the fiber as a vegan alternative to fining agents like isinglass and synthetic options that are used to clarify beer.
But inhibiting the growth of yeast, mold and fungi in food and beverage products offers a bigger opportunity. The market for natural preservatives was worth an estimated $435.2 million in 2022, according to Future Market Insights. The research firm said the market is expected to nearly double by 2032.