Mushroom-based packaging start-up attracts £3m in seed funding

A sustainable packaging start-up that uses agricultural waste and an extract derived from mushrooms to create an alternative to single-use plastic has raised £3m in seed funding, it has announced today.

The Magical Mushroom Company utilises mycelium – the root structure of a mushroom – to create a material that is biodegradable within 45 days, durable, and comparable in price to traditional packaging derived from fossil fuels such as polystyrene. Since its inception in 2019, it has attracted an international client base including Selfridges, Lush, Seedlip, and ID Watch.

The company today announced it has completed its latest fund-raising round, which was led by Ecovative Design LLC with participation from Dale Vince, founder of Ecotricity; Robert Del Naja, the renowned activist artist and musician; and Marcus Watson, a co-founder of Adoreum Partners. Together they helped to bring 30 other investors into the round.

The Magical Mushroom Company said its solution is a direct replacement for plastic-based packaging, such as polystyrene, and has the potential to remove them entirely from global supply chains.

“We have just eight years to meet the UN’s Sustainable Development Goals and businesses have a crucial role to play – but they need viable and cost-effective solutions that significantly reduce the carbon footprint across their entire supply chain,” said Paul Gilligan, CEO and founder of Magical Mushroom Company. “We’re proud to be creating value from waste and unlocking the potential of mycelium – a resource that has been unapped to date.”

The investment will be used to implement automation upgrades at the company’s existing packaging plants in the UK and Bulgaria to scale production, as well as opening the firm’s first raw material production plant. The 10,000 square foot raw material plant – which is due to open in Beeston, Nottinghamshire – will be the Magical Mushroom Company’s fourth plant and will allow the company to “gain control of its entire packaging manufacturing process”, creating up to 15 jobs in the East Midlands.

“The packaging industry is ripe for change and innovative solutions must be supported so that we can move away from our reliance on fossil fuels,” said Thomas Van Haren, director of MycoComposites at Ecovative Design LLC. “In the Magical Mushroom Company, a viable alternative already exists that is producing high-quality sustainable packaging on an industrial scale.”

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