SINGAPORE, 8 AUGUST 2024 – Mushroom Material, a start-up replacing styrofoam with the world’s first pelletized fungi packaging, has secured over US$5 million (NZ$8.5 million) in Seed funding. Wavemaker Partners, one of Southeast Asia’s leading VC firms, and Singapore’s SEEDS Capital have led the investment along with Icehouse Ventures, K1W1, and Black Kite Capital.
Founded in 2020 by Shaun Seaman and Jotinder Singh, Mushroom Material aims to provide a sustainable and scalable alternative to single use synthetic styrofoam. The company has developed a unique process to grow millions of fungi based pellets, which are then coated in a binding agent, allowing it to be shaped into customised packaging solutions.
This technology not only addresses scalability but also cost-effectiveness, making it a viable alternative to traditional styrofoam.
“For a business sending 100 million television sets or dishwashers to the other side of the world, single use styrofoam is realistically the only option to protect them at the moment,” said Seaman.
“At Mushroom Material, we’re aiming to bridge the gap between the packaging industry’s need for scalable, cost-effective solutions and society’s demand for environmental sustainability. Our mission is to scale this technology to meet global demand for eco-friendly packaging, delivering superior material characteristics while maintaining uncompromised sustainability,” said CEO, Shaun Seaman.
The investment is being used to establish a 1,300-sqm pilot plant in Auckland’s Mount Roskill in New Zealand. Mushroom Material plans to start delivering orders to existing customers in 2025, addressing the growing global demand for eco-friendly packaging.
The environmental impact of single-use styrofoam packaging is immense, emitting vast amounts of greenhouse gases, with millions of tons ending up in landfills and oceans annually. To combat this, the global packaging industry is in the midst of a monumental sustainability overhaul, where regulatory and environmental pressures are mounting on distributors to phase out single use packaging. However, while countries around the world introduce taxes, responsibilities, bans, and tight deadlines, the lack of a viable Styrofoam alternative means many manufacturers have maintained their Styrofoam usage.
Andy Hwang, General Partner at Wavemaker Partners, says: “The startup has developed a unique technology that integrates with existing styrofoam production lines, reducing costs and increasing efficiency. The significant market opportunity and strong regulatory demand for sustainable alternatives position Mushroom Material for substantial growth.”
“SEEDS Capital is delighted to partner Wavemaker to support Mushroom Materials in their plans to scale its commercial operations and pilot moulding facility in Singapore, and anchor here to unlock new markets in the region. We look forward to the company’s next phase of growth,” said Tan Kaixin, General Manager at SEEDS Capital.
Jack McQuire, Partner at Icehouse Ventures, expressed strong confidence in the company’s vision and technology. “For the outsized problem of single-use plastic packaging, we need an outsized solution. Mushroom Material’s scalable and cost-competitive technology unlocks the potential for a global impact on sustainability.”
“They have overcome the hurdles to make this technology rapidly scalable and cost competitive, unlocking the potential for an exponential and global impact on sustainability. Their recent success in Asian markets is just the beginning and we can’t wait to see Mushroom Material grow,” McQuire said.
Mushroom Material’s packaging solution is not only compostable but also offers excellent shock absorption, low density, and natural water resistance. It can be produced from various organic materials, including food waste, cardboard, and agricultural waste such as hemp, straw and wood chips, promoting a circular economy for its customers.
Already gaining significant interest, with over 200 companies expressing intent to purchase, Mushroom Material is poised to make a substantial impact. As the second New Zealand company to be accepted into the globally renowned Techstars accelerator, the start-up is well on its way to transforming the packaging industry.
Mushroom Material’s innovative approach to sustainable packaging represents a significant leap forward in the fight against plastic waste. With strong investor backing and a clear path to scalability, the company is set to lead the charge towards a more sustainable future.
About Mushroom Material
Mushroom Material offers a groundbreaking solution that replaces expanded polystyrene (styrofoam) with a sustainable alternative derived from mushrooms. The material matches the properties of styrofoam for impact resistance as well as thermal and acoustic insulation, whilst being 100% sustainable and home compostable. Thanks to their industry-first pellet method, they are uniquely positioned to produce at scale using existing moulding machinery and supply chain. Join Mushroom Material in revolutionising the packaging industry for a greener future.
About Wavemaker Partners
Wavemaker Partners is Southeast Asia’s leading VC firm investing in early-stage Enterprise, Deep Tech, and Sustainability startups. Since 2012, it has backed more than 200 companies across the region, with more than US$400 million in total committed capital and exits generating over US$2 billion in enterprise value. Today, 87% of Wavemaker’s active portfolio startups in Southeast Asia are contributing to at least one UNDP Sustainable Development Goal. In 2021, the firm launched Wavemaker Impact, the region’s first-of-its-kind venture builder that aims to co-found climate-tech startups with proven entrepreneurs. For more information, visit https://wavemaker.vc/ or email orbit@wavemaker.vc.
About SEEDS Capital
As the investment arm of Enterprise Singapore, SEEDS Capital catalyses smart investments into innovative Singapore-based early-stage startups with strong intellectual content and global market potential. We adopt a co-investment model, working hand in hand with institutional investors from around the world. Leveraging our collective expertise and networks, we help startups commercialise, realise their business development plans and expand globally. We focus our investments into emerging and strategic sectors aligned with national priorities, including Manufacturing, Trade & Connectivity, Human Health & Potential, Urban Solutions & Sustainability, and Smart Nation & Digital Economy.
About Icehouse Ventures
Icehouse Ventures is a New Zealand-based venture capital firm. The firm is headquartered in Auckland and has been investing in Kiwi founders building global companies since 2003. Icehouse Ventures can invest from pre-seed through to IPO and have $250m in assets under management.
