*First published August 31, 2017. Updated Sept 14 to reflect $35m deal close amount. Updated Oct 27 to reflect final close on $42m.
MycoTechnology, the company using mushrooms and fungi to remove bitter tastes from food and drinks, closed its Series B funding on $42 million.
A previously seen SEC filing indicated that MycoTechnology had raised $34.9m of a targeted $40.3 million Series B round, but an investor in the round indicated that the target amount would be reached and the final round closed oversubscribed.
The round was led by S2G Ventures with co-leads Bunge Ventures and Emerson Collective. Additional investors included Health For Life Capital / Seventure Partners, Middleland Capital, Tao Capital Partners, Eighteen94 Capital, Continental Grain, GreatPoint Ventures, Closed Loop Capital and Windy City.
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 the MycoZyme process, the startup puts foods through a seven to 21-day sterilization, inoculation, myceliation and drying process using mushroom and fungi 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 sugar and sweeteners, the company argues.
The company is currently offering two products for commercial use, according to its website. ClearTaste, which the company calls a “flavor modulator” or “bitter blocker” that can offset the need for sugar and salt. PureTaste is protein powder made from mushrooms that the company called “the most sustainable protein on the market.”
These “bitter-blocking” products also have applications for beer & alcohol, monkfruit, protein powders, supplements and other beverages, according to the website.
MycoTech also previously announced plans to remove natural gluten from wheat.
The proceeds from this latest round will go towards a new product: PureTaste. PureTaste is a non-GMO, vegan mushroom protein that is low in calories, fat and carbohydrates but loaded with vitamins and minerals that cannot be found in other competitive proteins, according to a press release.
MycoTechnology offers a range of services with its technology including licensing its tech, managed services, individual contracts to create products, and custom R&D.
MycoTechnology raised a $9.2 million Series A in October 2015.