An IT sales executive turned foodtech entrepreneur, MycoTechnology cofounder and CEO Alan Hahn got the call that dramatically altered his career trajectory just over a decade ago.
“I’d spent 20 years in California working in high tech, cybersecurity, multi-factor authentication and so on, and I got a phone call from a friend of mine that was thinking about investing in a company that was coming together in Denver. Would I come and check it out?
“I said great, what kind of tech company is it? And he said, ‘It’s a mushroom company.’ Of course, I laughed and there were a lot of jokes, but I was intrigued, and I got on a plane. When I saw what they were doing, it blew me away.”
Supported by $220 million from backers including sovereign wealth fund the Oman Investment Authority and Nourish Ventures (Griffith Foods’ venture capital group), MycoTechnology has since commercialized two platforms utilizing mycelium, the filament-like roots of mushrooms: ClearIQ bitter blockers and flavor modulators (now sold in 100+ countries) and FermentIQ fermented plant proteins.
A third platform—a 100% fungi-based whole food ingredient for meat alternatives—will be produced at a new plant in Oman, which is expected to open in late 2025.
AgFunder News (AFN) caught up with Hahn (AH) to talk about the magic of mycelium, global expansion, and staying focused.
AFN: Tell us about the team behind MycoTechnology, and what you originally envisaged for the business
AH: The other three founders were Jim Langan [a chemist]; Dr. Brooks Kelly [a biologist and mycologist] who came out of Penn State; and Peter Lubar, who has a business background, and is all about driving our global expansion.
At the beginning it was about using mycelium to transform coffee and cacao through fermentation. We got coffee beans from three local companies, fermented them and gave them back. And they all said the same thing: This is the first technology they’d ever seen that removed bitterness without introducing a secondary defect.
The compounds [produced by the mycelium] bind to the bitter receptors on your tongue, which is the opposite of what the food industry tends to do, which is mask bitterness and off notes with sugar or salt or something that is going to overwhelm your taste buds.
AFN: How did the business model evolve over time?
AH: When we started, we were fermenting the coffee and cacao beans themselves, so we were taking in these giant bags of beans, adding moisture, sterilizing them, adding the inoculant [mycelium], letting them ferment for a week, drying them, and then giving them back [to the chocolate/coffee companies]. But it quickly became obvious that this business model didn’t make any economic sense, and so we went to the science team and said the industry wants a powder that they can just add in tiny amounts to foods and beverages rather than having us ferment the raw material.
So they went back to the lab, and after a few weeks Jim came back and said, I’ve got it! We had a product in powder form. So I took the powder [now called ClearIQ], flew down to the IFT show in New Orleans, and it was a hit. The cost in use is also pretty low because on average in beverages, you are only adding around five parts per million.
Having said that, now we’ve figured out how to do the full fermentation process with coffee and cacao beans in the countries of origin, so that’s something we’re going to be rolling out at some point, the ability to just ferment in the field.
Today, for our ClearIQ product we grow the mushroom mycelium from Cordyceps Sinensis in a submerged culture fermentation process [in sugary liquid in big steel fermentation vessels], which creates a solid biomass and a liquid supernatant that looks like beer. It’s a beautiful golden color. We take that, extract the water, and it becomes ClearIQ.
AFN: If I threw some mushroom mycelium into a fermentation tank and fed it sugar, would I get Clear IQ?
AH: No! It took us years to figure out how to make it right and make it consistent. When we first did it, it was hit and miss, and it took us two years to get a really consistent product. We’ve got a lot of IP in the form of patents, but also a lot of trade secrets.
AFN: What are the killer applications for ClearIQ?
AH: We started with coffee because the cost changes based on how bitter it is, with a smoother cup costing more. Chocolate was the next obvious application, as cacao is bitter. If you lower the bitterness, you don’t have to add as much sugar, and some chocolate manufacturers have been able to achieve a 50% reduction in sugar with ClearIQ [which is listed as ‘natural flavor’ on labels in the US].
Next we moved into proteins as all these companies were developing products with plant proteins that have off notes. If you add ClearIQ, products such as protein drinks and plant-based meat and dairy taste so much better. You don’t have to add masking agents or salt, fat and sugar to make them taste good.
The other area where we saw real potential was high intensity sweeteners such as stevia and monk fruit, which have an aftertaste that we can clean up with ClearIQ. And then we started looking at dietary supplements, where you find that almost anything that has a functional property [botanicals, CBD] will have off notes. ClearIQ also works well in inexpensive vodkas, which can have strong ethanol notes.
But basically we can transform anything with bitter, sour, or stringent off notes, and as a result ClearIQ is driving the revenue of the company today. It’s available in over 100 countries worldwide, with beverages as the killer application.
AFN: Your 2nd and 3rd product platforms target meat and dairy alternatives. Is that market as hot as it used to be?
AH: FermentIQ [pea and rice protein fermented by Shiitake mycelium] is doing very well, and Planterra [a plant-based subsidiary of meat giant JBS, which abruptly closed down last year] was only one customer for that product. But I think what happened more generally is that after Beyond Meat went public in 2019, everyone was rushing to get products on the market and they didn’t meet consumer expectations on the four pillars of taste, texture, price and nutrition.
First there was all this trial and excitement, and then reality set in. So now the industry is looking for the next generation of products, which is where our new whole biomass products will come in [which will likely be labeled as ‘oyster mushroom mycelium,’ or ‘oyster mushroom root’], because they meet consumer expectations across all four of these pillars.
To get mass adoption for meat alternatives, they must be equivalent to [conventional] meat on taste, texture, and price. And on nutrition, they should be superior.
But we shouldn’t forget that the meat-alternatives market is still in a very early stage of development. The industry has to learn and iterate as what consumers are saying right now is that these products are interesting, but they’re not hitting those four pillars needed for mass adoption.
AFN: What’s the plan in Oman?
AH: With our first protein product [FermentIQ], we were taking plant proteins and transforming them through fermentation. But then we asked what if we create new products from 100% oyster mushroom mycelium? And that’s what we’re doing in the Middle East where we have the opportunity to use dates as an inexpensive carbon source [feedstock for the mycelium].
We’re going to break ground on the plant in Oman in the fall and we’re also going to make some changes to our facilities here in Colorado so we can also make it [a 100% mycelium product] in the US.
The exciting thing is that the dates we’re using as a feedstock are not going to be consumed by humans; we’re using dates left to rot or feed animals because they’re not the right color, shape, or size for the market. We take them and create a syrup to get the sugars [to feed the mycelium], but we also take the pits, pulverize them, and add that back in later in the process. The goal is to eliminate waste at every level.
The new [100% mycelium] product is truly amazing. We just did a tasting in Saudi Arabia and it went very well as it’s a whole food, an unprocessed food, with about 40% protein and 50% fibers including beta glucans that are great for gut health, plus vitamins such as B12.
We haven’t decided on a name for the product yet, but we’re just growing oyster mushroom mycelium, squeezing off some excess water, adding in some flavor, seasoning and fat, and that’s it. And you don’t have to run it through an extruder as it naturally has the texture you want. We just mechanically spin off the water when we harvest and it basically looks like a very light-colored dough.
Part of our IP is having the fungi consume the pigments [in the dates], so you end up with something that could be an alternative to white chicken meat, which is really exciting. But it can also work as a lamb, pork or beef alternative as it has a very neutral taste.
AFN: Why build a plant in the Middle East?
AH: Oman imports a huge percentage of its food, and we started talking during the pandemic when they were looking for a solution to food security. The whole project is around doing everything domestically to produce super high-quality food, diversify the economy, and create jobs and opportunities. This facility will not only supply the GCC area [Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and UAE] but will also export to India.
AFN: What are your global ambitions?
AH: What we’re doing in Oman is just the first facility outside the US, and we’re already in discussions about the second one after that as we work with other countries to address food security.
Right now we have a presence in 100 countries through our distributor partners; we’re building an exceptional team in Europe and we’ve just hired our first person in Singapore. The goal is to have the sun never set on MycoTech’s empire!
AFN: What’s next for MycoTechnology?
AH: Staying focused is important. When we started, we quickly came up with almost 30 projects, but we had to narrow that number down dramatically so we could actually execute and get products commercialized. Our pipeline is huge, we’ve got decades of opportunity in front of us, but we’re very focused on getting products to market before we dilute ourselves to the point where we delay things.
AFN: Last year you announced a series E round taking your cumulative funding to well over $200m. What’s next?
AH: We’re good with cash. Our goal is to go public, but we’re at the mercy of the markets and we want to grow more before we get to that point. So probably somewhere around 2026 we’re hoping the conditions will be appropriate [for an IPO].
AFN: 10 years into this journey, what gets you out of bed in the morning?
AH: Right now we get most of our food from the animal and the plant kingdoms. But when it comes to this third kingdom of fungi, we’re just eating the tip of the iceberg, the long stem and the cap [the fruiting body of mushrooms]. So there is a huge opportunity to utilize the largest organism in the world, which is the root system, the biomass and bring sustainable nutritious products to market in a cost effective way.
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