MycoTechnology, the company using mushrooms and fungi to remove bitter tastes from food and drinks, has completed its Series A round with a commitment from Closed Loop Capital, the Pennsylvanian venture capital firm, and other undisclosed investors.
The final investments take the round to $9.2 million after MycoTech held a first close on $6.7 million in August after getting commitments from S2G Ventures, Seventure Partners, and Middleland Capital.
This is the latest investment for Closed Loop Capital, a family office-backed, open-ended venture fund focused on agriculture technology and food system innovation in the US and Canada. The fund has been making two to three investments every year for the past three years.
These investments include Beyond Meat, the plant-based meat alternatives company, which is currently raising a Series E round; Conservis, the farm management software; Inocucor Technologies, a biotech company developing biological accelerators for produce; and Mercaris, a market data service and online trading platform for organic, non-GMO agricultural commodities.
Closed Loop has yet to fully deploy its first fund and it’s still on the lookout for more deals, AgFunderNews learned.
MycoTechnology has created waves in the food industry as the sugar and sweetener industries look set to be disrupted by its technology. Through a system dubbed MycoSmooth, the startup puts foods through a seven to 21-day sterilization, inoculation, myceliation and drying process using mushroom roots.
The mushroom mycelium, as the roots are also known, are trained to consume unwanted aspects from foods. The food product is first inoculated with the mycelium then left to ferment and later dried to remove the mycelium.
MycoTechnology has applied this process to chocolate, coffee, and green tea, to remove the bitterness and therefore, the need to use sweeteners, the company argues. MycoSmooth is also being using for grains to enable manufacturers to add healthy ingredients, such as more proteins, without having to mask the taste with other additives in what MycoTech calls “defect masking”. The process also adds healthy beta-glucans, known to help control the metabolism, and can lower the glycemic index of grains, enabling people to more effectively burn off glucose. MycoTech has also developed technology to remove the gluten completely from wheat.
Another technology it has developed is MycoZyme, which is helping to remove the bitter aftertaste from the natural sweetener stevia by using mushroom enzymes. MycoZyme takes six hours to complete and can be easily integrated into manufacturing processes.
MycoTechnology offers a range of services with its technology including licensing out, managed services, individual contracts to create products, and custom R&D.
The company will use the proceeds to double the team over the next few months, and to build a new facility with the aim of moving in early 2017.
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