Mushroom leather just got one step closer to the mainstream

BY BELLA WEBB

LINDSEY FILOWITZ

Hermès-backed startup Mycoworks says it is ready to scale its mushroom leather alternative after proving its efficacy at scale via production runs for Hermès and securing new funding.

The San Francisco biotechnology firm has raised a $125 million Series C funding round led by Prime Movers Lab, alongside new investors SK Networks and Mirabaud Lifestyle Impact and Innovation Fund. The investment will be used to build its first full-scale manufacturing plant in South Carolina, giving it the capacity to produce several million square feet of its proprietary Fine Mycelium material, called Reishi, each year. A pilot plant in Emeryville, California last year produced over 10,000 trays of fine mycelium proving its possibility. One tray is equivalent to half an animal hide.

The new plant could make mushroom leather a more readily available option. However, there is competition and low consumer awareness to contend with. High profile sustainability leader Stella McCartney works exclusively with rival Bolt Thread’s mylo material; Ecovative has formed a fashion cooperative with Danish affordable fashion retailer Bestseller and Tommy Hilfiger parent company PVH to reach scale for a mass market; and Gucci has developed its own vegan leather called Demetra, used in a capsule of Ace sneakers in June and available to the broader fashion industry from the beginning of this year.

For its first public brand collaboration, Mycoworks targeted high-end luxury, applying its customised Sylvania material to the Hermès Victoria bag in 2021, and bringing the brand’s former CEO Patrick Thomas onto its board of directors. CEO Matt Scullin declines to share names at this stage, but says Mycoworks will be announcing a number of high-profile collaborations in the coming year across the price spectrum.

“We are supply constrained, which is a good position to be in,” Scullin says. “The scale we will be delivering is still just a drop in the bucket of the overall opportunity and demand from our brand partners.” The new plant is already fully contracted and will be fully operational by 2023. Scullin says the company has a “rough plan” to open one new plant per year to meet demand, both in the US and globally.

The new MycoWorks facility is modelled after the company’s semi-automated Emeryville pilot plant, which has processed over 10,000 trays of Fine Mycelium in one year. LINDSEY FILOWITZ

Fine mycelium uses the renewable root structure of fungi to generate customisable materials from waste biomass that mimic the feel, durability and quality of animal leathers. Mycoworks used previous funding — totalling $62 million, with past investors including singer John Legend and actor Natalie Portman — to develop a library of product features, streamlining the made-to-order and made-to-specification process for new brand partners. This includes making the material thinner or thicker, enhancing its properties by embedding other materials, and bringing its hand-feel closer to sheepskin than cowhide. Orders can be fulfilled in a matter of weeks, cost competitive with high quality animal leathers.

“We have seen a massive increase in demand for alternatives to animal leather,” says Nina Marenzi, founder and director of The Sustainable Angle and its annual Future Fabrics Expo. Many of these materials offer new capabilities, and come in more standardised shapes that are easier to work with than animal leather, she continues.

Alternatives to animal hides have become more popular as brands seek to move away from leathers and furs. They’re not perfectly sustainable solutions, however, with many relying on plastic. “There is an untapped demand for quality vegan leather products,” says Jefferies equity analyst Kathryn Parker. “However, we do believe that cow leather will remain acceptable compared to fur and exotic skins due to the rest of the animal being widely eaten. It is currently difficult to determine the margin impact of a switch from cow to vegan leather as production quantities remain very small.”

Fine Mycelium materials have already been adopted by Hermès. JESSE GREEN, COURTESY OF MYCOWORKS

The main challenge for alternatives to animal leather, Marenzi says, is addressing end-of-life, especially if additional materials — sometimes synthetic — are embedded into the mycelium. “These materials could replace some of fashion’s most polluting materials, which is great, but thinking you can just produce more products in more sustainable materials without addressing overconsumption is a fallacy.” MycoWorks declined to comment on end-of-life for its partner brands, but a spokesperson said the company is working on creating the best use cases for Fine Mycelium and helping partners understand the material’s life cycle. Asked how scaling up will impact the company’s overall environmental footprint, Scullin defers to an upcoming peer-reviewed life-cycle assessment. He does say, however, that it’s a “carbon negative” process, with some emissions associated with shipping and tanning.

Awareness could be another barrier. According to Boston Consulting Group, 38 per cent of US consumers claim to be unaware of leather alternative products, while 37 per cent say that it is unclear to them which products are and aren’t alternatives. Consumers are willing to pay up to a 10 per cent premium for more sustainable alternatives to leather, but this is dependent on alternatives providing characteristics leather cannot, such as weather- and scratch-resistance.

With brands on board (albeit undisclosed), Scullin isn’t concerned about awareness. “We have a huge pipeline of partners who want to build products with us,” he says. “The biggest barrier we have is expanding quickly enough to meet demand.”

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