Biotech start-up MycoWorks closed $45 million in Series B financing — upping capacity for its Reishi vegan leather ahead of anticipated luxury fashion and footwear partnerships.
MycoWorks is a California-based company founded in 2013 by Sophia Wang and sculptor Philip Ross. The funding round was led by Taiwan-based WTT Investment Ltd. and DCVC Bio, and included A-list investors like Natalie Portman and John Legend in the mix. Details were not given, but several “major fashion brands” additionally participated in the investment round.
The news follows a Series A $17 million investment round that was revealed in February, bringing the total funding to $62 million. Coinciding with the opening of a new Reishi production plant in Emeryville, Calif. — the investment will go toward meeting production demand for the “vegan leather” material by building out proprietary technology, headcount and future production sites.
“‘Vegan leather — I think it’s more than that. I think the way that the fashion industry is looking at this in the long-term is they have to change their supply chains. Their supply chains are not tooled for changes in consumer taste,” said Matt Scullin, chief executive officer at MycoWorks.
Market research firm Infinium Global Research predicted in a March report that the vegan leather market would be worth nearly $90 billion by 2025 — looking at the viability of polyurethane, recycled polyester and bio-based leather alternatives across sectors.
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Once feared for having the potential to completely derail sustainability efforts, the coronavirus pandemic has placed supply chain resiliency at the forefront of the industry rebuild in line with new consumer desires.
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Scullin continued to rattle off shifting consumer desires like a demand for less plastic and less animal-derived product, as well as increased localization and transparency. On how Reishi captures that demand, he added: “We can engineer it as it’s growing. Reishi is more of an advanced manufacturing breakthrough than a sustainability breakthrough.”
The company is betting on the advanced manufacturing process behind its Reishi material, which is “grown” to sheets via a proprietary process called “fine mycelium” (tapping cells found in fungi, but it is not to be confused with mushroom leather). The material has a comparable hand to cowhide leather and can be manufactured as such.
“The fact that we can grow it does provide multiple sustainability benefits. The process of growing the mycelium is carbon-negative. Not to say that the total footprint of the product is carbon-negative — overall the footprint ends up being much lower than animal leather or plastic leather,” Scullin reiterated. The company will release a third-party, peer-reviewed lifecycle assessment on the material’s benefits soon.
Meanwhile, a slew of buzzy materials manufacturers including Ananas Anam (producer of Piñatex), Bolt Threads (producer of Mylo, mycelium leather), and Desserto (Mexico-based cactus leather), among others, are looking to ink commercial partners.
What separates one from another?
“We are taking the approach to be as transparent as possible,” Scullin began. “It all comes down to product testing. You can’t move forward with any brand unless the material passes the very basic performance testing and quality test. We publish the third-party test data on our web site.”
Aiding the commercial scale of Reishi, the newest location will be MycoWorks’ third production facility and boasts a 20-times increase in current nameplate capacity, representing tens of thousands of square feet of material per year.
“This is all about being able to process more trays. Our scale up from here is about how we can build more facilities to process these trays,” Scullin said.
Similar to animal leather, traditional tanneries finish the Reishi sheets with proprietary “green, chrome-free chemistry,” according to the company, which is said to preserve the sense of craftsmanship demanded by luxury goods producers — without undue environmental trade-offs.
Reishi will be hitting shelves soon, as MycoWorks will be unveiling partnerships in the coming months “with leading global luxury fashion and footwear brands,” according to a company statement. Scullin was unable to provide further information but said Reishi is being rendered in several different types of leather goods including sneakers, boots, ready-to-wear, bags and wallets.
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