South Korean startup Mycel said it has raised $10 million (13 billion WON) in a pre-Series A round of funding. The company makes fungal-based biomaterials that can replace leather and meat.
Co-founder and CEO of Mycel Sungjin Sah told TechCrunch that the company “uses mycelium, a root-like structure of mushroom, to make leather substitutes that can be used in car seats and luxury cosmetic products, and fashion products like shoes, clothes and bags. Mycel is in talks with global cosmetic brands to co-develop the mycelium-based leather products as well as cosmetics ingredients”. Additionally, it aims to commercialize its mushroom leather in 2023.
The new funding will be used to open a production plant in South Korea for scaling the manufacture of its fungal-based biomaterials and double its headcount to 42 employees.
Mycel is among eight companies across the globe using mycelium to make leather, according to the 2021 Material Innovation Initiative report. A San Francisco-based startup called MycoWorks raised $125 million in a Series C round early this year, while Bolt Threads also secured $253 million at a 1.15 billion valuation in September 2021. Ecovative Design also closed $60 million in March 2021.
Investors in Mycel’s latest financing round include Korea Development Bank, Industrial Bank of Korea, Hyundai Motor’s Zero 1 Fund, Stone Bridge, We Ventures and Spring Camp. Its pre-money valuation is approximately $40 million, according to Sah.
The global wholesale market of next-generation plant-based, microbe-derived, mycelium, recycled and other sustainable materials is estimated to reach approximately $2.2 billion by 2026. Luxury fashion brands such as Stella McCartney and Hermes, have collaborated with other companies to make handbags using mushroom-derived leather.
Mycel is also competing in the alternative protein space with fungi-based food developers like Mycorena and Quorn.
The company develops biomaterials for both mushroom-based leather substitutes and alternative proteins, and plans to enter Singapore with its fungi-based biomaterial that will be used in alternative proteins as early as next year, Sah noted.
