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Sustainable packaging startup Magical Mushroom nabs £3M; to open raw material production plant

Magical Mushroom team
Image credits: Magical Mushroom

A sustainable packaging startup from London, Magical Mushroom Company, has grabbed £3 million in seed funding. The investment round was led by Ecovative Design LLC with participation by Dale Vince, founder of Ecotricity – the world’s first green energy company; Robert Del Naja, the renowned activist – artist and musician; and Marcus Watson – an co-founder of Adoreum Partners, who brought in 30 investors.

First raw material production plant

The sustainable packaging startup is in plans to scale its eco-friendly packaging solution. This investment will be used to fund the opening of Magical Mushroom Company’s first raw material production plant. The 10,000 square foot raw material plant due to open in Beeston, Nottinghamshire will allow the company to gain control of its entire packaging manufacturing process, creating up to 15 jobs in the East Midlands.

Part of the funds will allow Magical Mushroom Company to implement automation upgrades at the company’s existing packaging plants in the UK and Bulgaria to scale production and lower costs and the pricing structure.

Paul Gilligan, CEO & founder at Magical Mushroom Company, said: “We have just eight years to meet the UN’s Sustainable Development Goals and businesses have a crucial role to play – but they need viable and cost-effective solutions that significantly reduce the carbon footprint across their entire supply chain. We’re proud to be creating value from waste and unlocking the potential of mycelium – a resource that has been untapped to date. We’re delighted to have the support of a brilliant group of investors who have a wealth of experience in driving sustainable change and share our vision for the future of packaging solutions. The magic of mushrooms is only just being realised and we can’t wait to make it mainstream.”

Thomas Van Haren, Director of MycoComposites at Ecovative Design LLC says: “The packaging industry is ripe for change and innovative solutions must be supported so that we can move away from our reliance on fossil fuels. In the Magical Mushroom Company, a viable alternative already exists that is producing high-quality sustainable packaging on an industrial scale. Paul and his team have made incredible progress in a short period of time as demonstrated with the opening of their latest high-tech plant in the UK. We were inspired by their vision to scale the business and we’re looking forward to supporting their mission to help remove polystyrene packaging from manufacturing supply chains.”

Eco-friendly packaging solution

The global plastic waste more than doubled from 2000 to 2019 to 353 million tonnes with 40 percent of that waste coming from packaging. Meanwhile research suggests that 90 percent of public sustainability claims will not be met by 2025 with the majority of companies remaining reliant on single-use packaging.

Founded by Paul Gilligan, Magical Mushroom Company’s solution is a direct replacement for plastic-based packaging such as polystyrene and cardboard and has the potential to remove them entirely from global supply chains.

The company places agricultural waste to work by combining it with mycelium, which is the root structure of a mushroom. It creates a material that is biodegradable, durable and comparable in price to traditional packaging derived from fossil fuels like polystyrene. Unlike other compostable packaging, Magical Mushroom Company’s packaging breaks down naturally in the ground in around 45 days without any additional chemicals or industrial facilities.

The company has a fast-growing client base of international brands, including Raymarine, BA Components, Castrads, Ffern, Selfridges, Lush, Seedlip and ID Watch and others.

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