Biotech company Mogu raises 11 million euros in funding

Italian biotech company Mogu Srl, also known as Sqim, which specialises in biofabricated materials made from pure mycelium, the root structure of mushrooms, has raised 11 million euros in Series A funding to allow for further industrial scaling of its innovative technologies and to develop its Ephea and Mogu product lines.

The funding round was led by CDP Venture Capital and co-led by ECBF VC, with participation from Kering Ventures and from existing shareholder Progress Tech Transfer.

Stefano Babbini, chief executive and co-founder of Sqim, said in a statement: "I’m extremely proud of what we just achieved. Sqim's team has been working very hard in the last years with the mission of proving that innovation, sustainability, and industrialisation can not only coexist but even offer an 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.”

The funding will enable Mogu to accelerate industrial scaling, including a new demo production plant, as well as expand its team and boost its research and development efforts by capitalising on Sqim’s proprietary biological fermentation and biochemistry technological platform, which cultivates mycelium on a pure basis by eliminating the use of contaminating chemicals along the growth process and guarantees consistency in quality.

It will also be looking to raise awareness of how it transforms low-value materials and residues from agro-industry into functional and high-value products, such as Mogu dedicated to interior design and architecture, and Ephea, a new class of animal-free alternatives primarily dedicated to fashion and automotive.

Ephea, which helped Sqim win the ANDAM Innovative Prize 2023, is described as the “most organic, viable, and otherwise environmentally sound alternative to leathers and synthetics,” for use in luxury fashion products. Made from employing pure mycelium, Ephea consumes minimal resources and emits trace amounts of CO2, as mycelium grows by feeding on low-value agro-industrial feedstock.

The innovative material made its commercial fashion debut during the Balenciaga autumn/winter 2022 catwalk show as a maxi hooded wrap coat.

Kering Ventures invests in Italian biotech company Sqim

Maurizio Montalti, chief mycelium officer and co-founder of Sqim, said: "This successful fundraising 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 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.”

Commenting on the investment, Marie-Claire Daveu, chief sustainability and institutional affairs officer at Kering, added: “Innovation plays an essential role within our Kering sustainability strategy. Today, we are proud to be part of this fundraising, as we strongly believe alternative materials are part of the solutions to reach our environmental goals.

“The innovative alternative developed by Sqim can contribute to expanding our offer on high quality materials. In addition to our internal Labs, Kering teams are keen on building an external ecosystem of innovators and companies so that these innovations can be adopted on a larger scale. With our new ambitious target of 40 percent reduction in absolute emissions, we need now, more than ever, innovative players like Sqim to speed up the transition towards a more sustainable industry.”

Mogu, established in 2015, is based in Inarzo, Italy, and adds that the company will be globally known as Sqim, which will become its legally official name within a few weeks following the closing date of the funding round.