In case you missed it, 2019 was declared the year of the mushroom! In celebration of this myco-explosion that’s upon us, our latest installment of “Alumni in the Wild” profiles another mushroom maven (don’t miss our first mushroom-y profile of Smallhold), MycoTechnology. Inc.
We sat down with Chief Science Officer Anthony Clark to discuss what it takes to grow an idea around the untapped potential of mushrooms into a disruptive B2B ingredient player that’s attracted over $70m in investment and has 17 granted patents with over 40 pending patents. Here’s what he had to say.
How is MycoTech disrupting the food industry?
MycoTechnology is a biotech company that makes food and ingredients using mushrooms. It started out as the brainchild of Dr. Brooks Kelly and Jim Langan, two young scientists who wanted to harness the power and versatility of mushrooms to create a protein-rich vegetable source that could boost a product’s nutritional value. And it worked…very well.
The modest mushroom is a bit of a superstar in the food world right now. It’s a particularly interesting market too because producers generally drive ingredient and food movements, but in this case, momentum is coming from consumers. They understand more about food and its effects than ever before, and we’re using that knowledge and their desire to do better by their bodies, to influence and disrupt. There’s an important shift happening around ownership too; an acceptance that we need to take more responsibility for the choices we make when it comes to food, because it determines how healthy our metabolism, gut, immune system, skin, sleep and heart will be.
Mushrooms can help with all of that. They’re a key component in adaptogens and bring a host of unique benefits to any food they’re added to. For example, shiitake mushrooms are the only “vegetable” source of B12 and some mushrooms offer exceptional cognitive health and anti-aging properties. We bridge the gap between nutrition and taste, proving food can be flavorsome and functional.
Tell us more about how you’re tackling two major food challenges: sugar reduction and protein consumption.
I spent 20 years in the flavor and fragrance industry trying to perfect bitter blocking and mediation compounds, and never found anything natural. MycoTech has cracked that conundrum with a complexity that really sets us apart. Our ClearTaste® product starts out as beer made from vegetables and a yeast substitute called Cordyceps sinensis, or the ‘mushroom of immortality’ as it’s sometimes known – an exotic creature that lives high in the Himalayas. We spray-dry the beer and the powder becomes a powerful flavor modulator, reducing bitterness in things like coffee or high intensity sweeteners, meaning you can use less sugar without compromising a product’s taste.
In terms of the competitive landscape, the sugar free/reduced sugar market is big and busy, but we have a unique process and a winning combination so we’re at the top of our game. PureTaste® is a protein product made with shiitake mushrooms to create a macro ingredient that works as a bio catalyst; it removes the unpleasant taste usually associated with pea or rice protein. As a sustainable source of protein, PureTaste® competes on a lot of levels, but a more affable flavor means it’s versatile, user-friendly and can be incorporated easier into products like meat alternatives.
You’re a B2B company. How does your product resonate with the end consumer and why is that important?
We create products that resonate well with clients and are easy for clients to sell. Five and half million metric tons of vegetable protein was sold in the US last year – a figure that’s growing over 6% annually. We can help meet that increased demand with a clean, nutritious, good tasting product, and because it comes with the notoriety of using mushrooms to deliver all that good stuff, the story adds value to the producer’s proposition.
Last year you closed a $30m Series C to fund a new production facility. What were your key takeaways from the fundraising process?
We set out to attract a mix of strategic investors and venture capital money and we’ve benefited enormously from the blend we now have on our board. There’s an art to bringing in harmonious investment. Startups hear that a lot in the early days and it’s tempting to view all money equally when you want to get something over the line, but for investment to work well, it means finding the right people, money and partners.
We raised $42m in our 2017 Series B round which was used to build our headquarters and lab facilities. The Series C round that followed was an additional $30m, taking us into profitability, or through the valley of death as some call it. We used that to scale the business and add to our product line. To make all this possible we’ve had to make and take opportunities to get in front of the right people. FoodBytes! was excellent for that; our relationship with Rabobank has proved invaluable and we have no doubt that the introductions we made through them added to our fundraising success.
What excites you most about MycoTech’s plans for the future?
There’s a lot of strategic discussion happening around new products, partnerships and joint developments. I’m excited to see where that will take us because they’re the kind of conversations that drive innovation and accelerate a new product’s path to market. Between the interest in our existing ingredients and our innovation pipeline, there’s a very clear map for growth. We’re busy patenting the platform too, with 17 granted applications and 49 others pending. As such, we’re in a very strong position from an IP perspective and confident we remain the ‘go to’ place for any product or component that involves our good friend, the mushroom.