New York-based Ecovative has raised $11 million in a funding round that includes $1.68 million in grant and loan funding from the Advance Albany County Alliance to expand its mycelium-based alt meat and textiles businesses.
Much of the capital—raised from undisclosed existing investors—will support the expansion of mycelium-based product MyBacon from MyForest Foods (which was spun out from Ecovative in 2020). The rest will go to Ecovative’s Forager division, which makes mycelium-based materials that can be used in everything from home-compostable earplugs with noise reduction to footwear and handbags, said the firm.
“The funding supports the addition of a new production and packaging line for MyBacon, and a new MyForest Foods Food Science Lab to launch new whole-cut mycelium products.”
Cofounder Eben Bayer told AgFunderNews: “We’re the fastest selling alt meat in the breakfast category in North America in the natural channel in absolute dollars, so we have a product that people really love. We have three times the average sales velocity [in the plant-based breakfast category] and we sell at a higher price, plus we have great repeat purchase rates.”
MyBacon is now in 1,200 stores including Whole Foods, Fairway Markets and Fresh Direct, with plans to get into around 4,000-5,000 stores by the year end, said Bayer, who has also picked up business in direct-to-consumer channels such as Hungryroot, Purple Carrot, and Good Eggs.
“We’re also planning to introduce a new product that will be a complimentary pork product that will sit alongside our bacon, and we’re making a big move into the foodservice channel later this year.”
Solid state fermentation process
While many startups that grow mycelium use submerged biomass fermentation, which has high capex and operational costs, MyForest deploys a patented solid state fermentation process that is less capital intensive, with “very simple” downstream processing steps, said Bayer.
“The cultivation system we use has a bunch of benefits. The first is the mycelium has an incredible texture that is preserved when you harvest it, so you don’t have a lot of downstream processing costs. The second is that the mushroom farms we partner with [to grow mycelium using MyForest’s proprietary process] are already really scaled in North America and Europe.
“But even with all these advantages it’s still challenging. We’ll probably double our yield again over the next five years, which will make this a very profitable food business, but just getting to breakeven with a completely new crop like this is a real challenge.”
He added: “We’ve been very cautious in our expansion, but we’ve really got the process [for the MyBacon business] going well at four farms now—one in upstate New York, one in Canada, and two in the Netherlands, so the system has been replicated at a number of sites. We’ve also got a new pilot starting with a partner in Pennsylvania this year.”
Asked when he expected MyForest to be profitable, he said: “We’re in striking distance of generating positive margins, so if we raise more capital, it will be against growth targets [rather than to stay afloat], so we’re at a really exciting transition point.”
