Smallhold, a Brooklyn-based specialty mushroom company on a mission to shorten the distance between consumers and sustainably-grown food, has announced a $25 million Series A investment. The round is led by Astanor Ventures, a European investment firm.
Additional funding is provided by Energy Impact Partners and Wheatsheaf Group alongside early investors, including AlleyCorp and David Barber’s fund, Almanac Insights. The funds will be used to continue growing Smallhold’s network of technology enabled mushroom farms and bring its operations to the West coast.
In less than a year, Smallhold has increased production by more than 500 percent. The brand began with five retailers and is now in nearly 250 restaurants and grocery store locations such as Whole Foods Market, FreshDirect, H-E-B, Safeway / Albertsons and Central Market. The company has expanded its footprint building expansive macro farms in Brooklyn, NY and two in Austin, TX. The fourth is slated to open in the Los Angeles-area in early 2022.
“We want Americans to eat more and better mushrooms and we’ve created a sustainable way to grow fungi indoors,” said Andrew Carter, co-founder and CEO. “The mushroom category is growing exponentially as consumers can experience better, fresher and different fungi closer to home.”
“Smallhold uses proprietary technology to grow mushrooms,” said Carter. “Mushrooms are grown absurdly close to end consumers. That’s important because while fresh is best for all produce, it’s especially true for mushrooms. Ideally, speciality mushrooms aren’t shipped around the globe--it’s less sustainable and degrades quality because they’re so delicate.”
Smallhold’s tech-enabled approach rethinks traditional agricultural practices and its circular model reimagines what sustainability means for a changing world. Smallhold mushrooms are grown off of waste streams from other industries (think: sawdust from the lumber industry) to create blocks of substrate inoculated with mycelium (the “roots” of a mushroom). Then, mushrooms are cultivated vertically indoors in hyper-controlled environments with minimal inputs, monitored by patented technology that gathers data points per day and creates an optimal growing environment. Finally, mushrooms are harvested into eco-friendly, compostable packaging and delivered to a tight local radius surrounding our farms. The vast majority of the waste created is actually a compost additive that Smallhold donates to artists, farms, schools and nonprofits across the country every single week. None of Smallhold’s spent substrate goes to landfill.
“Fixing the nation’s broken food systems gets us closer to saving the planet, which is why we’re building a network of USDA Certified Organic farms and reducing the distance food must travel to reach consumers,” said Carter. “With a simplified supply chain and savory flavor, mushrooms are a viable meat alternative. We’re creating a path for Americans to eat more and better mushrooms and we’re proud to have investors that support that mission.”
