Let me introduce you to the fascinating world of fungi. You probably know fungi best as the mushrooms that tend to spring up after a good rain and may think they extend no further or deeper than the bottoms of their stalks. But mushrooms are merely the fruits – the fungal fruiting bodies, to be more precise – of the mycelial networks that produce them, most of which are in the soil and may be invisible to the naked eye. Fungi are neither plant nor animal; while they grow subterranean branching transport systems (mycelial networks) like plant roots, they cannot produce their own food; while they consume food from external sources like animals, they can’t really move around. Some types of fungi can enter into symbiotic relationships with plants, especially trees, “bartering” nitrogen they extract from the soil for carbohydrates produced in photosynthesis by plants.
Mycelial networks are composed of fast-growing tubes called Hypha, and their cell walls contain Chitin – the material found in insects’ exoskeletons that makes them hard. (More later on why that’s important.) Mycelial networks can be vast: the largest organism on the planet is a single colony of Honey Mushroom fungus in Malheur National Forest in East Oregon that’s over four square miles and between 1900 and 8650 years old. And mycelial networks represent a large percentage of all the biomass on the planet. Mycelial networks perform many indispensable tasks for our species, including decomposing wood and other matter that would inconveniently pile up. (They also can cause disease and death to plants and animals alike, but that’s another story for another time.)
Fascinating indeed. But we should also care about Fungi because they can help us innovate solutions for some of our more intractable problems. Like trash. We are one wasteful and messy species, producing 2.3 million tons of trash every year.
Fungi are excellent decomposers, and some species, like the White Rot Fungus, can be trained to eat just about anything – even a monotonous diet of cigarette butts, as Radical Mycology founder Peter McCoy has demonstrated. Brazilian scientists have successfully cultivated fungi out of dirty diapers. Fungi can help clean up unintentional waste as well: mycoremediation start-ups are hoping to deploy fungi to clean up toxic oil spills, and neighborhood groups in California are using fungi to try and remediate the toxic runoff of the devastating 2018 wildfires.
But fungi aren’t just good for breaking things down. They may be an important component of future material creation harnessing the diversity, and malleability of mycelial networks. The chitin in the cell walls lends strength and structure to materials produced from fungi. Albany, NY-based Ecovative creates, designs, and manufacturers mycelial-based packaging and building materials, counting Dell among its clients. Mycelium-based materials can be engineered to have desired properties by adjusting the diet it is fed in a controlled environment – and it can be grown in just about any form you can imagine using molds. And unlike other common building materials, mycelial products can decompose quickly and even be repurposed with a fresh infusion of mycelium. Although still an experimental building material, it holds immense promise.
It’s no surprise that the VC community is investing in interesting fungi-focused start-ups that may represent the future of multiple industries. The table below features five notable fungi-based companies, with nearly $850M in collective funding from investors like the CVC units of 3M, Danone, Tyson, and Mars, as well as prominent individuals like Mark Cuban. Although most of these are in the food industry, expect to see many more springing up in the building products and environmental remediation industry spaces in the years ahead.