Sqim secures €11m to grow mycelium-based sustainable fashion materials

A new wave of material innovation is emerging from the natural power of fungal mycelia. A renowned biotech company Inarzo (Italy based SQIM), formerly Mogu SRL, holds the credit behind this flagship. The company, which specializes in mycelium-based technologies for various industries, has secured €11m ($12m) in a Series A funding round led by CDP Venture Capital and supported by ECBF VC, Kering Ventures, and Progress Tech Transfer. The funds will enable Sqim to launch a dedicated demo plant to showcase its industrial scale-up and expand its product lines, Ephea and Mogu, which offer sustainable and circular solutions for fashion, automobiles and so on.

Founded in 2015 and globally recognized as a pioneer in mycelium-based technology, SQIM is a multidisciplinary, innovation-driven biotechnology and biomaterials company. SQIM is at the forefront of materials innovation, continuously delivering innovative materials and products by harnessing the natural power of mycelium. Today, SQIM serves markets such as fashion, interior design, furniture and automobiles.

SQIM’s approach incorporates a meaningful demonstration of effective opportunities to truly “make things better“, through technologies and products that significantly reduce environmental impact and promote sustainable activities.

Figure: Sqim plans to accelerate research and development activities and strengthen its team to advance further its two prominent business lines and brands – Ephea and Mogu

How SQIM is pivoting the transformation of agro-industry residues:

By doing fermentation, Mogu transforms low-value materials and waste from the agricultural industry into functional, low-impact, high-value materials. They utilize mycelium as a biofabrication agent. To date, the company has developed two main verticals:

  • MOGU, a specialized architecture and interior design brand offering a variety of wall, floor, and acoustic treatment products
  • EPHEA aims to produce animal-free materials for automobiles and luxury fashion industries.

In this project, mushroom mycelia complex substrates (the ingredient base that the mycelium feeds on) are converted into palatable biomass that is rich in proteins and other valuable nutrients. The production of fungal mycelium can be divided into two main fermentation techniques:  solid- or liquid-state fermentation. Both approaches are pursued within the Smart Protein project, with Mogu focusing on the former and Fraunhofer IME-BR on the latter.

The company says this unique fermentation technique interconnects selected mycelial cells to create panels made entirely from mycelial biomass. These raw materials are processed and finished in collaboration with leather industry partners into high-quality, luxury materials for the fashion industry. The process is environmentally friendly and uses no chrome, and Mogu is expected to easily expand into other segments and markets.

Roadmap to an Ambitious Expansion; Words from the CEO:

Stefano Babbini, CEO and co-founder of SQIM, expressed great pride in the company’s achievements. He emphasized that SQIM’s diligent efforts over the years aiming to demonstrate that innovation, sustainability, and industrialization can coexist and add value to various industries.

He said in an interview, “I’m extremely proud of what we just achieved. SQIM team has been working very hard in the last years to prove that innovation, sustainability, and industrialization can not only co-exist but even offer added value to different industries whether properly cooked. This amazing company step represents the natural outcome of such efforts, creating the conditions for delivering a real impact in next future. There is a huge excitement around our job, and we feel like we are about to start a new journey. There is no doubt we have found the best Partners supporting our ambitious plan.”

At the same time, Maurizio Montalti, Chief Mycelium Officer and Co-Founder of SQIM, see the successful fundraiser as a validation of their breakthrough technologies and next-gen materials. He also commented: “This successful fundraise is a validation of the potential of our breakthrough technologies and next-gen materials and products. It will be a catalyst to accelerate our growth further and faster, while significantly boosting our R&D efforts. The investment will power the competence and creativity of our incredible teams, driving our plans to allow for the most effective market penetration of positively disrupting materials and products in Fashion, Interior, Automotive, and many more industries, to create a positive impact, while contributing to shaping a more ethically and ecologically responsible industry. We cannot wait to continue this incredible journey with our new partners.”

Figure: A collection of some mycelium-based materials

The visionary investors of this project:

CDP Venture Capital, an asset management company that manages 13 investment funds with resources of more than 3 billion euros, sees SQIM’s initiative as a huge opportunity at the intersection of various industries such as fashion, design and luxury. Enrico Filì, head of the IndustryTech sub-fund of the Corporate Partners I fund at CDP Venture Capital, highlighted the potential of startups to increase production and meet demand for sustainable and circular products. This funding cycle is more than just a financial boost for SQIM; this is a testament to the company’s innovative vision and its potential to make a significant impact on the industry, contributing to building a more ethical and environmentally responsible world. Other investors including European Circular Bioeconomy Fund (ECBF VC), Kering Ventures, and Progress Tech Transfer, participated in the funding round.

The fresh investment will therefore allow SQIM to further capitalize on its proprietary fermentation platform, continuing to incrementally and concretely impact the material innovation industry around the world.

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