Grandfather mushroom

About 90% of startups don’t make it to a Series A funding round, and even more collapse if they’re not able to start turning a profit by Series C. It has become all-too-common to watch alt-protein companies flame out in their early years. 

Then there’s MycoTechnology. At just over 10 years old, the liquid-state fermentation-enabled ingredient company is sort of like the grandfather of the alt-protein industry — and has its sights set on conquering the food and beverage space far beyond alt-proteins. 

Perhaps what sets the company apart is not so much its age but the deep experience and startup mindset of CEO Alan Hahn.

“I’ve been part of six startups, and I can tell you that you have to have the right team, the right vision, but honestly you also have to have some luck,” Hahn says. “One of my startups fell apart in October 2008, which may ring a bell if you followed the Lehman Brothers collapse. That was bad luck. But there are always things happening outside of your control, so you have to be laser focused on what you do well. And you have to be ready to pivot.”

This last thought makes Chief Technology Officer Ranjan Patnaik light up like a Christmas tree. 

“The ability to pivot quickly and realign over and over — that’s, I think, paramount,” says Patnaik, who joined the company in February 2023. “All of the pivots MycoTechnology has executed use the same resources with minor tweaks in the assets, so we never lose time and our product portfolio ends up being rich and diverse.” 

It all started with a mushroom
”When we formed the company, the original thesis was: Can we take plant-based inputs and improve them through mycelium fermentation in a liquid-state bioreactor? It was a radical idea in 2013,” Hahn explains. “At the time, mushrooms were white button mushrooms, the fruiting bodies you buy at the grocery store. There were some companies selling dried mycelium in pill form, but those had virtually no bioactive compounds. That was the whole industry at the time.”

But if you know anything about mushrooms, it’s not too radical. Mushrooms are supremely powerful. Their roots — known as mycelium — break down trees to return nutrients to the soil. They also take poison out of the soil and neutralize it. And, as Hahn and his partners discovered, they can transform plant-based ingredients, as well. 

The first compound they discovered — while fermenting coffee and cacao beans — was a bitter-flavor blocker and flavor modifier. It became the company’s first product, ClearIQ. 

They took that discovery one step further — fermenting a blend of pea and rice protein — to create their second product, FermentIQ. The process removed the bitter, beany taste and scent from the protein blend, but it also removed anti-nutrients, like phytic acid, that can make plant-based proteins difficult to digest. 

This has become a focal point of the company’s marketing scheme.

“Our internal research shows that most people aren’t willing to sacrifice taste for an external factor, like the environment,” explains Lisa Wetstone, vice president of marketing, innovation and growth strategy. “We have focused instead on the ways our product is better for the consumer, personally.” 

The company also focuses on the fact that FermentIQ is one of the few non-animal complete proteins on the market. “Pea protein, rice protein — those on their own are not sufficient as far as nutrition goes,” Lauren Sklarow, an application development manager, explains. “Our protein has all of the necessary amino acids. The only other complete plant-based protein I know of is soy, but soy has a negative connotation.”

MycoTechnology began commercializing the products to CPG companies. And because the ingredients are so new and unfamiliar, the company helps potential clients by creating finished prototypes with their ingredients. “We showcase our products and say, this is what you could do,” Sklarow says. 

With the products ready for market and employees engaged with customers, the R&D team turned its attention to the next project. 

Feel your halo
As the plant-based alt-meat industry advanced from tempeh and Boca to Beyond and Impossible, consumers expectations weren’t met, Hahn says, and they’ve grown increasingly disenchanted with the space. 

One problem: incredibly long ingredient lists on most brands. “If there are 20-something ingredients in this highly processed food, is this really better for me? That’s the question,” Hahn says. 

But MycoTechnology is brewing up what it sees as a solution to highly processed alt-proteins that consumers don’t want. If the company’s ClearIQ and FermentIQ are Gen 1 products, Hahn says MycoTechnology’s Gen 2 products include a new analogue made from gourmet mushroom mycelia called ShiroMeat.

It’s not an alt-meat, Hahn insists — it’s an entirely new type of non-animal meat. And it’s unprocessed, unlike the pea, rice and soy concentrates and isolates that make up most plant-based analogues. 

“This is a whole food and a complete food,” Patnaik explains. “When you sit down to eat a meal, you look for protein but you also look for fiber. In this product, you’re getting everything in one serving. The protein, fiber, nutrients, minerals and all the other bioactive molecules that are in the mushrooms. It has everything you need.” 

Local production, globally 
The company’s first adventure in ShiroMeat is getting started in Oman, a Mideast country that shares borders with Saudi Arabia, the UAE and Yemen. 

“The Middle East imports about 90% of their food, so Oman was looking to solve its food security problem by introducing domestically produced protein sources,” Hahn explains. “We were developing ShiroMeat, and it seemed like a perfect match.”

Oman, it turns out, is a huge producer of dates, but 50%-60% of the crop is either thrown away or turned into animal feed because the dates aren’t “pretty” enough for human consumption. MycoTechnology realized that they could use the wasted dates as a carbon source to feed the mycelium that produce ShiroMeat.

“Dates are a very good sugar source, and they perfectly fit into a fermentation profile,” Patnaik says. “The mycelium convert sugar into protein.”

The production method is simple because ShiroMeat is virtually unprocessed. At the end of the fermentation process, MycoTechnology mechanically spins off excess water, then sends the biomass through a blending machine to fold in flavors or fats. Downstream of that, the product can be shaped or breaded or pre-cooked — whatever a customer is looking for. 

“This is how we’ll help Oman transform from an importer of food to an exporter of food,” says Hahn. The company is aiming to break ground on a facility in Oman in early 2024 and begin shipping product by 2026.

In time, MycoTechnology will introduce a similar product for the U.S. market, made in its facility in Aurora. And there’s no reason to think the company couldn’t bring the technology to other countries in the future, though Hahn is laser-focused on Oman at the moment.

“ShiroMeat is a highly nutritious food that you don’t have to think about,” Hahn says. “Just eat it and enjoy it. I think this is the kind of product that will solve the challenges the alt-meat industry is dealing with right now.”

Growing the industry 
In September 2023, with the Oman project still unfolding, MycoTechnology launched FaaS, its new Fermentation as a Service offering, in the U.S.

Obviously, there’s financial gain to be had from opening up the company’s 86,000-square-foot facility to brew products for other companies. But for Hahn, it goes beyond that. 

“We’re excited about Fermentation as a Service. We’re going to be helping companies walk that last mile that’s been nearly impossible to cross,” Hahn enthuses. “If your company has discovered a protein with good functionality and you want to ferment it, where do you go in the United States? There’s really nowhere. But we have the capacity, we have the USDA-certified food-grade facility, and now we offer that service.” 

But giving up bioreactor capacity and time to other companies doesn’t seem a natural fit with the company’s overall goals: Continuing to produce its current product line, as well as a new sweetener product and, in the future, produce ShiroMeat for a U.S. audience. 

Not to worry, Hahn says. The bioreactors in the Aurora plant have more than enough capacity to support other businesses while still hitting their own product targets. 

“Our reactors are pretty darn big,” Hahn laughs. “We built our facility with space for expansion, but with time and tinkering, our processes became more efficient than we thought they could. Today, we can produce in seven days what used to take us a year. That opens opportunities to help others.”

The next generation
While the company is lining up clients for its Fermentation as a Service business, it’s also focused on the next generation — Gen 3 — of its own business: Looking at what makes different mushroom species unique and turning some of those traits into products.

“We’re learning from the mushrooms. We’re using genomics (studying genes), proteomics  (studying proteins that are expressed by genes) and a lot of analytics tools to understand their functionality,” Patnaik says. “Maybe one produces a molecule that gives a meaty scent, for example.”

The company has already had its first big success in the soon-to-be launched honey truffle sweetener, which is produced from a molecule in a rare truffle that’s 1,000 to 2,000 times sweeter than sugar.

“Most sweeteners are small molecules, which means they easily get into the bloodstream and flow throughout the body,” Hahn explains. “But the sweet molecule in the honey truffle mushrooms is a protein, a bigger molecule that is digested in the gut and never makes it into the bloodstream. So you get a wonderful sweetness with no aftertaste and no ill health effects.”

This success will serve as a springboard for future MycoTechnology ingredients as they continue to seek out highly functional molecules and commercialize them.

“The greatest thing a CTO can imagine is discovering and launching products quickly,” Patnaik says. “The honey truffle sweetener was discovered during Covid, and we’re already sampling to CPG companies. That’s unthinkable speed, and we’re getting faster as we learn.”

The R&D team is developing a discovery platform to mine mushrooms for new ingredients. They are also working on mixing and matching molecules to create natural ingredients that you’d never find in nature.

“You don’t have to chop down the whole tree to get an apple,” Patnaik says. “And with this technology, we don’t have to grow the whole mushroom to get an ingredient. We can make exactly what we need.” 

In just 10 years, MycoTechnology has come incredibly far, from simple fermentation to advanced genomics and ingredient development. And they’re not looking back or slowing down. 

“Right now, the company has 70 patents with 65 or so more still pending,” Hahn says. “And we’ve just scratched the surface of what we want to do. We’ll have a lot more in another 10 years.”