AgFunder-backed Chinova Bioworks raises $6m Series A funding for natural shelf-life extender

Disclosure: AFN’s parent company, AgFunder, is an investor in Chinova Bioworks.

Chinova Bioworks, a Canadian company producing “natural” shelf-life extenders from fungi, recently raised $6 million in Series A funding.

• The round was co-led by DSM Venturing, the corporate venture arm of DSM, and Rhapsody Venture Partners. Rich Products Ventures also participated.
• DSM Venturing and Rhapsody Venture Partners had previously invested $2 million in Chinova Bioworks’ seed round in 2018, alongside AgFunder and nonprofit Natural Products Canada.
• Prior to this, the startup had secured its pre-seed funding from the New Brunswick Innovation Foundation, SOSV, and the First Angel Network.

The Series A capital will go towards growing Chinova’s team and enhancing production capacity at its facility in Prince Edward Island, which is set to formally open in the coming months. It will also fund the launch of new products.

Why it matters:

Most produce designated for human consumption requires some form of preservation. The food industry has historically relied on mostly artificial, chemical-based preservatives. Research suggests that some chemical-based preservatives — such as certain nitrates, benzoates, and parabens — may cause hypersensitivity, allergy, asthma, neurological damage, and cancer.

According to Natasha Dhayagude, co-founder and CEO of Chinova Bioworks, there is demand from consumers for natural ingredients in their food.

“The [Covid-19] pandemic has accelerated the trend for food safety and health-focused products,” she said, in a statement by the company.

At the same time, rising urbanization and busy lifestyles are leading to increased demand for ready-to-eat foods with extended shelf lives. Taken together, these trends point to rising demand for safer, ‘natural’ preservatives.

The bigger picture:

The food preservation industry was valued at $2.6 billion as of 2021, according to Future Market Insights. This is projected to reach $5 billion by 2032, growing 6.8% annually over the next 10 years.

Nearly half of all the fruits and vegetables grown each year end up being wasted according to the UN. Among the leading causes of this waste is poor food preservation.

How it works:

Chinova Bioworks was founded in 2016 with the mission of reducing food waste and introducing a natural shelf life extender that could maintain the freshness and quality of food.

The company has developed a more sustainable and healthier alternative using white button mushroom fiber. It works with mushroom farmers to collect the stems, from which the fiber is extracted. The stems would otherwise typically be discarded, since they are the tougher part of the mushroom and less appealing to consumers.

Chinova says its product, Chiber, can be used in the preservation of dairy, plant-based meat, baked goods, sauces, and spreads, as well as beverages. It is also vegan, kosher, halal, and allergen-free.

Competitive landscape:

Other startups carving out their piece of the natural preservatives market include Ingredient Trading Company (ITC), an Australian business that develops flavor-neutral preservatives for dairy, bakery, and meat products.

US-based Mori uses natural silk protein to cover produce and slow down the spoiling process. In a similar vein, Polynatural is a Chile-based producer of organic coating used in the preservation of fruits; while California’s Apeel produces a plant-based spray-on coating to the same end [disclosure: AgFunder, is an investor in Apeel via the latter’s acquisition of ImpactVision.]

What they’re saying:

“Chinova is easy to work with, and their guidance with Chiber sampling, product formulation and testing helped streamline the product development process,” said Alberto Roca, head of Latin America research and development for Rich Products Corp, in a statement. “It was easy to switch to using Chiber as a natural preservative to garner the clean label benefits.”

“Chinova has been crushing it for more than five years,” added Bernard Lupien, general partner for Rhapsody Venture Partners.”It’s been amazing to see how quickly Chinova has been able to add customers, making investing a no-brainer. Furthermore, Chinova’s planet-friendly process of upcycling the otherwise discarded stems of white button mushrooms to create Chiber is precisely what consumers are asking for.”