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This startup just raised £3m to replace packaging with a mushroom mix

Magical Mushroom Company

London-based Magical Mushroom Company has raised £3m in seed funding to scale its eco-friendly packaging and to fund its first raw material production plant in Nottinghamshire.

The Magical Mushroom Company has come up with a potential solution to replace the use of plastic and cardboard in packaging.

It does this by mixing agricultural waste with the root structure of a mushroom (mycelium) to make a material that’s biodegradable and similar in cost to other packaging options.

“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, Magical Mushroom Company.

Unlike other compostable packaging, Magical Mushroom’s solution does not require the use of chemicals or industrial facilities and will break down naturally within 45 days.

With the new capital the startup plans on opening its first raw material production plant in Beeston, Nottinghamshire. The 10,000 square foot site will create up to 15 jobs in the region.

It will be the company’s fourth plant and allow for full control of its manufacturing. Funding will also be used to increase automation at Magical Mushroom’s other plants in the UK and Bulgaria.

Companies such as Selfridges, Lush, Seedlip and ID Watch are already using the mushroom packaging.

The seed funding round was led by Ecovative Design LLC. It also attracted capital from Dale Vince, the founder of green energy business Ecotricity; activist Robert Del Naja alongside co-founder of Adoreum Partners Marcus Watson who brought in 30 investors.

Thomas Van Haren, director, MycoComposites, Ecovative Design LLC: “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. In the Magical Mushroom Company, a viable alternative already exists that is producing high-quality sustainable packaging on an industrial scale.”

Last August an Oxford startup raised £58m for its use of psychedelic mushrooms to treat headaches.