Infinite roots (IR), formerly known as Mushlabs, is a German biotechnology company Mycelium, a material coming from fungi that has been hailed as the answer to everything from food to building materials. In a significant move for itself and the Mycelium startup sector, IR has now closed a $58 million Series B funding round, making it one of the largest technology investments in Europe to date.
The tour was led by Dr. Hans Riegel Holdings (HRH), best known as one of the two holding companies for the Haribo confectionery group (who hasn’t eaten Haribo?!). The round was also supported by the European Investment Board Fund (which makes direct equity investments in European startups).
REWE Group (a German tourism conglomerate) and Betagro Ventures from Hong Kong.
Existing investors, including Clay Capital, FoodLabs, Redalpine, Simon Capital and Happiness Capital, also participated. Prior to this round, IR had raised a $10 million Series A.
The company said it plans to use the new round to shift to commercial growth, expand its production capabilities, and invest in launch activities.
Dr. Mazen Rizk, founder and CEO of Infinite Roots, told me that the company is “uniquely positioned to define a new era of mycelium-based products.”
The mycelium, which is essentially the “root” of the fungus, is the non-reproductive part of the fungus. Fungi use mycelium to secrete enzymes that break down the food around them and absorb nutrients. This means, ultimately, that it can be turned into a variety of products, from fabric to building materials.
Now, not everything will be easy. IR has a few well-funded competitors.
In the US, Meati has raised $274.5 million to date. Nature’s Fynd raised $509.6 million. Myco Technology raised $207.6 million. Enough in the UK has raised $121.7 million. Then there’s Quorn, made by Marlow Foods, the godfather of fermentation and somewhat of a household name, which works on mushroom and mycelium products.
Just this month, biomaterials company Sqim, formerly known as Mogu SRL, closed $12 million funding round from CDP Venture Capital and others for its fungus-based industrial technology.
Using fermentation, Sqim is targeting two vertical segments: wall, floor and audio treatment products, and animal-free alternatives for the luxury fashion and automotive industries.
However, Rizk told me that the Series B round was created because of the scaling of technology that the company was able to do.
“We are taking a two-pronged approach,” he said. “One is that we take an asset-light approach to our facility as we work with existing facilities to produce our ingredients. This way we don’t need to invest heavily in capital expenditure. The other thing is that we are working with one of the largest breweries in Germany to renovate parts of the brewery and create their own production space.” Us, which means using the capacity of the brewery and using the waste that comes from the breweries as our production center.
He said that got a lot of his investors excited, plus they had some additional ideas: “We don’t want to imitate meat. We don’t want to create alternatives to just meat. We want to create products that are based on ‘Hey,’ that are delicious and healthy.”
Whatever the case, it is quickly becoming clear that access to industrial facilities will increasingly be the way forward for these microbial companies.
For example, last year Meati Foods moved into large-scale production of mycelium-based whole food protein, launching a “megafarm” in Colorado that was partially funded by a $150 million Series C round and an additional $22 million round . The facility aims to produce more than 45 million pounds of product.
Therefore, it is important for Infinite Roots to secure an industry partner for its next phase.