US$8.5 million seed round

A start-up replacing styrofoam with the world’s first palletised fungi packaging has raised a US$5 million seed round from Singapore’s Wavemaker Partners and local VC Icehouse Ventures. 

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The global packaging industry is in the midst of a monumental sustainability overhaul, where regulatory and environmental pressures are mounting on distributors to phase out  single use packaging. However, while countries around the world introduce taxes, responsibilities, bans, and tight deadlines, manufacturers have stubbornly maintained their styrofoam usage, for lack of a better option.   

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While there is a nascent fungi-based industry trying to fill this gap, Mushroom Material founder and CEO Shaun Seaman said that the existing solutions are not up to task for the massive scales and short lead times required by global distributors.

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“For a business sending 100 million television sets to the other side of the world, single use styrofoam is realistically the only option to protect them at the moment. Sure, there are other fungi-based packaging around, but they’re way too expensive and nowhere near scalable enough to fulfil an order like this,” said Seaman. 

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The existing mycelium packaging process sees fungi grown over 1-2 weeks in  a shaped mould, a manual procedure that is inherently difficult to scale. 

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Mushroom Material have developed the technology to grow millions of fungi pellets which can be quickly and easily bound together according to a manufacturer’s specifications; be that corners for a bulky dishwasher, or a box for a delicate speaker.  

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“There is no questioning the demand for sustainable packaging, but the current alternatives are not feasible for most businesses. Distributors need a solution that can match the performance of styrofoam without drastically affecting their bottom line. We’ve already proven this Mushroom Material, our next challenge is to scale the technology,” said Seaman. 

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Mushroom Materials’ investment round will go toward setting up a 1,300 sqm pilot plant in Auckland’s Mount Roskill, and start delivering orders to existing customers. 

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Icehouse Ventures’ Barnaby Marshall says that the company’s clear vision and proven technology made the investment a straightforward task. 

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The packaging startup was co-founded by Jotinder Singh in 2020, and is only the second New Zealand company to be accepted into the acclaimed Techstars accelerator in Singapore.

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As lead investor on the Seed raise, venture capital firm Wavemaker Partners will be critical for helping the Mushroom Material’s future operations throughout the Asia region. where the company has already seen broad commercial interest. 

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Mushroom Material has had inbound interest from more than 200 companies, some of which have signed agreements to purchase orders of the product when it reaches scale, including some of the largest furniture and electronics retailers in the world.

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In addition to its ability to scale at pace, Mushroom Material’s styrofoam alternative can be composted similarly to food waste, can withstand repeated shock absorption, has a relatively low density, and is naturally waterproof. 

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It can be grown from a variety of organic materials, including food waste, cardboard, and agricultural waste (hemp/ straw/ wood chips etc), creating the opportunity for a more circular economy for its customers. 

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Mushroom Materials intends to open its pilot plant officially by end of 2024 and will begin sending demonstration packaging to its customers at this time. 

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Media contact

Leni Maiai

leni@digpr.co.nz

022 413 1596

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Mushroom Material is a sustainable packaging company that has developed a mushroom based alternative to styrofoam packaging. The product combines agricultural waste with the root structure of mushrooms, better known as "mycelium". The material is completely sustainable and 100% biodegradable. It has the same protective properties as polystyrene and naturally degrades in your garden or landfill.​ Mushroom Material has the potential to change global packaging forever.