Israeli startup pulls in $2 million to use fungi for eco-friendly plastic packaging

MadeRight is developing sustainable materials using mushrooms for packaging to reduce the environmental impact of plastic

Sharon Wrobel is a tech reporter for The Times of Israel.

Israeli startup MadeRight develops fungi-based alternative fossil-derived plastic packaging. (Courtesy)
Israeli startup MadeRight develops fungi-based alternative fossil-derived plastic packaging. (Courtesy)

Israeli biotech startup MadeRight, which has developed a process of cultivating fungi for green packaging, has nabbed $2 million in seed funding to drive the production of eco-friendly industrial materials.

The funding round was led by Fresh Start foodtech incubator and group of investors including Israeli venture capital firm Arkin Holdings and ARC Impact, that back on early-stage startups.

Founded in 2022 by CEO Rotem Cahanovitc, a mycology expert, and CTO Yotam David, a molecular geneticist, Made Right is harnessing the way fungi function as natural recyclers to replace harmful materials in plastic packaging and reduce their environmental impact.

The startup is deploying fermentation technology to cultivate fungi grown on organic industrial waste such as wood chips, to produce sustainable materials that are biodegradable and free from pollutants to create a recyclable plastic alternative for packaging. The compounds are mixed with bio-plastics to create pellets that can be used and integrated in existing machinery and supply chain processes in the packaging industry.

“Fungi serve as nature’s recyclers, thriving on what we consider waste,” said Cahanovitc. “We harness the potential of fungi to fashion materials from renewable sources, fostering an economic circularity that will steer the future’s material revolution.”

Cahanovitc told The Times of Israel that the founding idea for the technology evolved after completing his volunteer work in Ethiopia, where he was confronted with the stark reality of families burning their plastic waste as a means of disposal.

MadeRight founders CEO Rotem Cahanovitc (right) and CTO Yotam David. (Courtesy)

“The concept of waste is a human construct, absent in the natural order, where Earth’s recyclers are fungi,” said Cahanovitc. “This realization spurred my contemplation of revolutionizing plastic production, aiming for plastics that could be effortlessly recycled or even composted.”

Over the past two decades, the amount of plastic waste has doubled, with most ending up in landfill, leaking into waste, soil and air, according to a report by the OECD. The amount of plastic waste produced globally is expected to almost triple by 2060, with only less than a fifth recycled.

About two-thirds of plastic waste in 2060 will be created from short-lived items such as packaging, low-cost products and textiles, according to the OECD. The share of plastic waste that is recycled is projected to rise to 17% in 2060 from 9% in 2019. Additionally, the production of packaging materials like plastic, glass and metal consumes energy and resources, resulting in carbon emissions.

Global recycling rates have remained relatively low, mainly due to plastic additives that are mixed into the packaging to prolong the shelf life of products but inhibit recyclability. This is where MadeRight comes in and aims to replace them with sustainable fungi-based materials.

MadeRight seeks to tap into the $363 billion global food packaging market, which is projected to grow to $512 billion by 2028, according to a report by Statista.

With the newly raised funds, the startup is planning to advance its target to introduce a commercially viable prototype of its product to the packaging market over the coming year and refine the production process. Ultimately, MadeRight’s pellets are tailored for integration into packaging production for manufacturers within the food, cosmetics, and other industries, the startup said.

MadeRight is part of the Fresh Start incubator in the northern town of Kiryat Shmona, launched by the Israel Innovation Authority to advance technology and innovation in food and agriculture. The incubator is backed by a consortium, which includes Israel’s largest food manufacturer Tnuva, Israeli beverage company Tempo, Israel-based crowd-funding firm OurCrowd, and French investment firm Finistere.

The center opened its doors in 2020 and currently works with a total of 10 food tech startups including one that is developing cell-cultured fish and two that are working on sugar reduction technologies.

Most Popular
read more: