New VC bets entirely on fungi startups: 'A very broad investment field'

Industrial pressure to find alternatives to fossil-based, chemical-heavy and resource-intensive solutions is creating opportunities for new types of companies – and the investors who seek them out.

One niche gaining increasing attention is fungi: mushrooms, mycelium and yeast that can be used in countless products.

A player positioning itself in this space is The Fungi VC – which launched in 2024.

Behind the venture is Norwegian Susanne Gløersen, who previously worked in sustainable finance at Swedish bank SEB and has spent recent years building several initiatives in the same area, including The Future is Fungi and their award – The Future is Fungi Award.

"I saw this enormous potential a few years ago and chose to leave SEB to build a global ecosystem around it," Gløersen tells Impact Loop.

Together with Sweden's Tarja Zudemberg – who has extensive experience investing in early-stage companies through Almi Invest, among others – she has built a dedicated fungi investor.

"I've always been interested in impact and nature-based solutions," says Zudemberg.

Building focus around fungi

According to Gløersen, fungi have long been underutilised, but technological development has now made it easier to use the organisms industrially.

She describes the development as far more significant than just another biotech trend.

"I see this as the beginning of the next industrial revolution, where we use microbes, biology, and nature's own systems instead of petrochemicals across various industries," says Gløersen.

Though fungi might sound narrow, they don't see it as a small niche. Rather, they believe the area cuts across many sectors.

"This spans construction, packaging, food, agriculture, cosmetics, green chemistry and energy, among others. It's a very broad investment field," says Gløersen.

Zudemberg adds: "It's almost magical. You can use it for so many things."

Doing things differently

The Fungi VC isn't structured as a traditional fund. Instead, they use a syndicate model where investors can participate either across multiple deals or in individual companies.

Gløersen describes it as an attempt to build something more flexible than a classic VC structure.

"We're the new kids on the block and want to do this differently," says Gløersen.

Some investors join intending to participate in several companies alongside The Fungi VC, while others come in deal by deal.

"It's a super syndicate. Some say they want to invest in seven to ten companies, while others come in case by case," says Gløersen.

This also allows more types of investors to participate.

"We bring together family offices and wealthy private individuals in the same structure," says Gløersen.

Family offices typically have higher entry levels, while angel investors can come in with smaller cheques. According to Gløersen, Fungi VC's own investments in companies typically range between €100,000 and €400,000.

The time horizon isn't meant to be ultra-short either, which suits a sector where development and scaling often take time.

"Biotech takes time. However, we're looking at possible exits after five to six years through secondaries, and we sometimes make follow-on investments when companies have progressed further," says Gløersen.

What they're looking for

When it comes to what makes them proceed with new deals, Gløersen returns to several factors: clear environmental benefit, research-based technology, scalability and areas that aren't already too crowded.

"We like what's new," says Gløersen.

She also says they're clearly drawn to more technology-heavy companies. "Preferably deeptech and ventures that actually break new ground."

Geographically, they're not limited to the Nordics.

"We look globally, from pre-seed to Series A," says Zudemberg.

Six investments so far

So far, Fungi VC has invested in six companies.

One is Anthology, a spinout from MIT and Harvard working on genome engineering for industrial use of fungi. Another is Funga, which works on carbon storage and forestry by inoculating tree seedlings with fungi to make them grow faster and reduce mortality.

The portfolio also includes Norwegian NoMy, which uses fungal fermentation to convert waste streams and food waste into new proteins, and US-based Michroma, which develops fungi-based dyes to replace chemical-based colours in food.

Additionally, Fungi VC has invested in German Mycolever, which is building a platform for discovering and developing new fungi-based solutions, and Danish Mycoverse, a DTU spinout developing fungi-based fungicides for agriculture.

Three to five investments this year

Part of their deal flow comes from the network and global ecosystem built around the area. According to Gløersen, their fungi award received 187 company applications last autumn, providing more deals to examine.

The plan for this year is to continue building the portfolio.

"We're now aiming to make three to five investments during the year," says Gløersen.

Meanwhile, they want to bring more investors into the structure.

"Right now we're out meeting families and private investors who want to help build this space."