In a surprising turn of events, Mycorena, a Swedish startup known for its fungi-based proteins and fats, announced it has filed for bankruptcy, citing “significant financial challenges.” This decision follows the company’s failed attempts to secure funding for its Series B round and a month after it halted plans for a commercial-scale factory.
The Struggle for Survival
Mycorena has been grappling with financial difficulties for the past two years. “Our team has explored every possible avenue to save this pioneering company,” said chairman Tore Sveälv, as the company appointed Advokatfirman Lindahl KB to oversee the bankruptcy process.
Despite these challenges, there’s a glimmer of hope. Co-founder and CEO Ramkumar Nair revealed to Green Queen that some of Mycorena’s former shareholders are forming a new consortium aimed at buying back the bankruptcy estate and restarting operations, offering the company a "fresh restart."
Since its inception in 2017, Mycorena has raised over €35 million in equity funding, including a record-breaking Series A round for a Nordic alternative protein startup. However, fundraising for large-scale capital-expenditure projects has become increasingly difficult. “Investors want to see strong binding offtake agreements before committing to large projects, while partner companies are hesitant to sign without proven production capabilities,” explained Nair.
The slower-than-expected growth of the alternative protein market in Europe has compounded these issues, forcing Mycorena to pivot back to its demonstration facility in Gothenburg. “Despite this pivot, the accumulated challenges of the past two years have left us with limited options,” Nair said, describing the bankruptcy filing as an emotionally tough but necessary decision.
The Path Forward
The macroeconomic environment for food tech has been challenging, with a 61% drop in investment in 2023 and alternative proteins experiencing a 44% decline. Despite this, fermentation-based startups have managed to attract significantly more capital compared to plant-based and cultivated meat companies.
“We are in a phase of consolidation and correction that isn’t over yet,” said Albrecht Wolfmeyer, director of ProVeg Incubator. This sentiment is echoed by the recent closures of several businesses in the sector, including Nowadays and Sunfed Meats.
Despite these hurdles, there is still optimism. Globally, the plant-based meat and dairy sectors saw minor growth, and Europe experienced a rise in investments. Mycorena is now shifting from a B2B model to a B2B2C approach, focusing on private labels and the foodservice market.
“We aim to leverage our knowledge in product development to create final consumer products,” Nair stated. The goal is to retain the founders and all employees, continuing Mycorena’s journey under new ownership.
A Bright Future for Mycoprotein
Nair remains confident about the future of mycoprotein. Even industry giant Quorn is re-strategizing by entering the blended meat space. Other companies like Scottish-Dutch, Finland’s Enifer, and The Better Meat Co are also making significant strides.
“We have created significant value in the industry over the last seven years,” Nair concluded. “We are confident that Mycorena has a place in the industry moving forward, and we are glad to see that some of our shareholders and investors share this belief.”
Mycorena’s story highlights the volatility of the alternative protein market but also underscores the potential for innovation and growth. As the company navigates its way through bankruptcy, the industry watches closely, hopeful for a successful revival.