Sustainable packaging startup Magical Mushroom Company raises £3m funding in seed round

Magical Mushroom Company, the sustainable packaging challenger harnessing the magic of mushrooms, has raised £3m in seed funding to scale its eco-friendly packaging solution.

The round was led by Ecovative Design LLC with participation by Dale Vince, founder of Ecotricity, the world’s first green energy company; Robert Del Naja, activist, artist and musician; and Marcus Watson, a co-founder of Adoreum Partners, who brought in 30 investors.

According to research published by OECD, global plastic waste more than doubled from 2000 to 2019 to 353 million tonnes with 40 percent of that waste coming from packaging. Meanwhile, research suggests that 90 percent of public sustainability claims will not be met by 2025 with the majority of companies remaining reliant on single-use packaging.

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

Magical Mushroom Company puts agricultural waste to work by combining it with mycelium, the root structure of a mushroom, to create a material that is biodegradable, durable and comparable in price to traditional packaging derived from fossil fuels like polystyrene.

Unlike other compostable packaging, Magical Mushroom Company’s packaging breaks down naturally in the ground in around 45 days without any additional chemicals or industrial facilities.

This investment will be used to fund the opening of Magical Mushroom Company’s first raw material production plant. The 10,000 sq ft plant, due to open in Beeston, Nottinghamshire will be 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.

Part of this funding will allow Magical Mushroom Company to implement automation upgrades at the company’s existing packaging plants in the UK and Bulgaria to scale production as well as lower costs and the pricing structure.

Paul Gilligan, CEO & founder at Magical Mushroom Company, said: “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.

“We’re proud to be creating value from waste and unlocking the potential of mycelium, a resource that has been untapped to date.”