Chinova Bioworks, a Fredericton-based company that uses mushrooms to make food preservatives and other ingredients, has raised a $6 million Series A funding round.
The company plans to use the money to expand its Prince Edward Island production facility, which will formally open this summer, as well as staff up and launch new products.
The round was led by DSM Venturing, the venture capital arm of Dutch health and nutrition company DSM, and Rhapsody Venture Partners — both based in Cambridge, Massachusetts. The two firms are returning investors from a US$2 million raise Chinova booked in 2018.
Chinova “upcycles” castoff mushroom stems, which it collects from farmers, into a range of natural white label food ingredients, including its flagship offering, which is a preservative called Chiber. CEO Natasha Dhayagude and her team announced the raise in a statement last month.
“The pandemic has accelerated the trend for food safety and health-focused products,” said Dhayagude.
“With this increased consumer awareness and scrutiny, brands are under pressure to keep up and reformulate their products to meet clean-label demands. Departing from artificial preservatives is one of the most critical and challenging changes food producers must make.”
In its statement, the company said the latest funding deal comes “at a time of substantial growth” for its business.