- Colorado-based organic food technology company MycoTechnology raised $39 million in a Series D funding round with the participation of Greenleaf Foods, Tyson Ventures, Kellogg's investment arm and S2G Ventures, among others. The latest infusion of capital will help expand the company's functional ingredients platform.
- The company’s platform uses the filament-like roots of more than 60 types of fungi to produce better-for-you products. However, the firm is best known for its ClearTaste off-flavor blocking ingredient and PureTaste plant protein ingredient, both of which are mushroom-based.
- CEO Alan Hahn told Food Navigator he is looking to take the company public with an IPO in the second half of 2022.
Demand for sustainable, plant-based protein is growing and companies are looking for ways to fulfill consumers' requests for more alternatives. MycoTechnology developed a food processing platform to turn agricultural materials into functional ingredients, and it has attracted big-name investors. Its total funding now stands at $120 million.
This funding round is the third one Kellogg's VC arm Eighteen94 Capital has participated in. Initially, Kellogg participated in a $35 million round in fall 2017 and then again in last year’s $30 million funding round. In previous releases, company leaders indicated MycoTechnology’s commitment to creating a sustainable protein source and its "cutting edge" mushroom fermentation platform as the reasons behind its continued support.
While pea protein and soy are staple alternatives in the plant-based market, mushrooms are just beginning to shine as a viable source of nutrients and protein for manufacturers. The global market is projected to jump from $34.1 billion in 2015 to $69.3 billion by the end of 2024 as more applications for mushrooms are discovered, according to Transparency Market Research.
Already, MycoTechnology claims its PureTaste ingredient — which is low in calories, fat and carbohydrates, and high in vitamins and minerals — can be used in baked goods and cereals. The company says it can also create juicier meats because of its water and oil retention properties, and it can impart a smooth mouthfeel in dairy applications. If these claims hold up in taste tests, the large CPG conglomerates that have invested in the technology will be interested in introducing it into their manufacturing processes.
Not only does this food technology company produce plant-based protein, but the ClearTaste ingredient has also shown it can reduce the amount of salt needed in lunch meat without changing the taste. Should this application be extended further to other typically salty products, including soup, sauces and frozen foods, more CPG companies will likely show interest in testing it out.
The company's investment partners may also be looking into launching products made with these ingredients as they work toward achieving the FDA's voluntary sodium-reduction guidelines. However, Hahn told Food Navigator ClearTaste's No. 1 use is for sugar reduction strategies, since the off-taste masking solution can counteract the metallic aftertaste of stevia.
The Colorado company is clearly making waves in the functional ingredients space by enabling companies with all different flavors to create more clean-label and functional solutions. While there are many working toward ingredients that limit salt and sugar and provide another protein alternative option to the market, few companies are looking to tackle all these issues simultaneously, let alone with fungi.
This unique differentiator makes MycoTechnology stick out from the crowd and draw the attention of big-name investors. Its dedication to mycology and mushroom solutions will likely also gain the attention of the public and other firms as the company builds up to its IPO in the next two years.
While IPOs can be notorious for stripping companies of autonomy and creativity as they become beholden to shareholders, Hahn told Food Navigator that going public will allow the company to better control its mission and assist in the widespread launch of new products that are in the pipeline.