Swedish food-tech Mycorena, a developer of mycoprotein ingredients, has discontinued its large-scale factory project to focus on a new pivoted growth plan.
The company, which has been active in the mycoprotein market since 2017, had been planning to build a large-scale production plant capable of producing thousands of tons of mycoprotein ingredients for the plant-based sector.
In a statement announcing the decision, Mycorena explained that while it has attracted over €35 million in funding, it has faced challenges due to ‘changing market conditions and an unfavourable investment climate’.
The company added that despite a €24 million Series A round in early 2022, it failed to raise funding for its Series B round in 2023 due to a lack of investor interest in the capital expenditure project within food-tech, and the ‘slow-moving market interest’ toward the mycoprotein segment.
The scale-up factory, designed in collaboration with Tetra Pak, aimed to achieve a total production volume of up to 100,000 tons in multiple stages, with an initial production capacity of 5,000 tons by the end of 2023.
Having discontinued the project, Mycorena said it will now redirect its focus to its core operations at its demo facility in Gothernberg, Sweden. It envisions its production scale-up journey to be more focused on a circular upcycling production model, unlocking the potential of co-location with industry partners.
"We still have strong confidence in the potential of fungi and mycoprotein's impact on the food system. However, given the current investor climate and geopolitical situations, we must pause our scale-up journey."
Ramkumar Nair, founder and CEO at Mycorena, commented: “The scale-up factory was conceived during the market peak. Now, with the market decline, we can't meet expectations on cost competitiveness from the industry.”
He added: “In addition, most of our key partners have also slowed their growth plans due to the changing market environment, adding more uncertainty to the scale-up project”.
Nair explained that while the start-up successfully scaled its Promyc ingredient, as well as other ingredients beyond mycoprotein – such as its fungi-based fat, Mycolein – the company believes its scale-up project suffered a case of ‘wrong timing,’ with market sentiments changing ‘drastically’.
Mycorena is now pivoting from a pure B2B ingredient sales model to a more B2B2C approach. Ebba Fröling, co-founder and COO at Mycorena, described the challenge it faced of a “constant catch-22 situation where investors demand binding purchase contracts to invest in capex, while food companies won’t commit without a proven large-scale production”.
She added: “After almost 24 months of efforts, we’ve concluded that the industry isn’t ready yet for big bets on mycoprotein or fermentation-related products. Therefore, we’re taking a step back to focus on our core operations and reinforce the interest in mycoprotein products before scaling up further.”
Mycorena’s revised business plan will maximise production capacity at its existing Gothenburg site, supporting existing and new partnerships. It plans to venture into foodservice and private label sectors, focusing primarily on the Nordic market, where consumption of mycoprotein is high combined with strong demand for locally produced alternatives.
The facility in Gothenburg has the potential to produce mycoprotein ingredients capable of supplying up to 500 tons of end-consumer products, planned to be rolled out during 2025.
Co-founder and CEO Nair concluded: “We still have strong confidence in the potential of fungi and mycoprotein's impact on the food system. However, given the current investor climate and geopolitical situations, we must pause our scale-up journey. We will also focus on our core competence of working with industry side-streams, to build a co-location-based scale-up production model for the future roll-out.”
