Fungu’it secures €4 million to scale fermentation-driven natural flavors from food waste

Dijon, France-based food-tech startup Fungu’it has announced it has raised €4 million (around US$4.3 million) to scale up its sustainable flavor technology, which transforms overlooked agricultural by-products into clean-label umami and chocolate alternatives using solid-state fermentation. The round, led by Asterion Ventures with participation from Evolem and UI Investissement via Oser BFC, will support the industrialization of Fungu’it’s production, the development of IP, and expansion of its commercial operations.

Founded in 2022, Fungu’it is tackling a major challenge in the food industry: how to replace synthetic or high-impact flavor enhancers with natural alternatives that don’t compromise on taste or functionality. At the heart of its platform is a low-resource fermentation process that uses filamentous fungi to upcycle regional by-products like sunflower press cake, legumes, and flax residues into high-value flavor powders.

Anas Erridaoui, CEO & Co-founder, described the company’s mission in simple terms. “We want to restore purpose in what we eat – without compromise. Through fermentation, we reveal the richness of overlooked raw materials to create flavors that are more accurate, vibrant, and accessible.”

The company’s flagship ingredients are already in use in early commercial products and pilot trials. One is a meaty, savory umami profile aimed at plant-based meat alternatives, where Fungu’it says its flavor can reduce salt content by up to 30% without sacrificing taste. The other is a cocoa alternative that can replace up to 25% of cocoa in a recipe, reducing reliance on tropical imports and curbing the carbon footprint of chocolate production.

“Cocoa farming is a major driver of deforestation,” Erridaoui continued. “Our chocolate flavor helps cut dependence on cocoa and offers a more sustainable, circular solution.”

Unlike more common submerged fermentation methods, Fungu’it’s approach mimics natural fungal growth on solid substrates, requiring far less water and energy. “We use about 10 times less water and 35% to 50% less energy,” Erridaoui said, noting that this leads to a water footprint 2.4 times lower and 92% fewer greenhouse gas emissions than conventional processes.

The inputs themselves are a key part of the story. Fungu’it sources by-products locally from agri-food players to keep its supply chain both circular and sovereign, and collaborates with industry partners to identify waste streams that are underutilized. “We look for inputs that are stable, available, and rich in functional or aromatic potential – and ideally, ones that avoid novel food classification,” said Erridaoui.

Fungu’it deliberately began with fungi that are already commercially approved and well-known in traditional food fermentation, particularly in Asia. “This helped us secure a stable supply and fast-track development, while building a platform we can later expand with our own strains,” he added.

Batch-to-batch flavor consistency is managed through careful substrate selection, tray mixing, and aromatic characterization. “Once we scale, variability drops significantly. And every batch goes through sensory screening before release,” said Erridaoui.

The new funding will allow Fungu’it to move from lab-scale to its first industrial pilot facility, with an annual production capacity in the tens of tons. The process will remain batch-based, using stackable trays in a modular layout that can be replicated next to raw material sources – a model the company believes will unlock distributed, low-footprint production.

While the pilot facility will be mostly manual, future sites will incorporate automation, especially in drying and packaging. “The process stays the same – we’re just scaling up with more trays and better efficiency,” Erridaoui explained.

The company is also building a proprietary ingredient database, mapping hundreds of strain-substrate combinations to better predict and design flavor outcomes. This data-driven approach supports faster development of new profiles and customization for partners.

Fungu’it is in the process of patenting several aspects of its method, including substrate preparation steps and possibly specific ingredient formulations. “We’re preparing a patent application that will protect the core of our process, with room to expand into new ingredients down the line,” said Erridaoui.

Fungu’it's flagship umami flavor is designed to compete directly with conventional enhancers like MSG and yeast extract. But Erridaoui says its broader sensory appeal is where it stands out. “Our flavor offers greater depth and roundness, with roasted, savory, and fermented notes. It enhances mouthfeel, masks off-notes in plant proteins, and supports salt reduction – all from upcycled, fermented materials.”

The company’s flavors are stable powders that integrate easily into common production workflows. They are also free from novel food classification, allowing immediate use across the EU and in other regulated markets.

Beyond umami and chocolate, Fungu’it is developing new aromatic profiles, including smoky notes, savory bases, and potential coffee or stock-like flavors. “We’re building a platform – not just a product line – and that means thinking about function as well as flavor,” Erridaoui said.

Texture, nutrition, and even color are part of the long-term roadmap. “Fermentation naturally provides compounds that support gelling, preservation, or visual appeal. These are next-level opportunities we’ll pursue with our partners.”

Fungu’it is already working with organic plant-based meat producers, but its ambition extends beyond niche applications. “We’re engaging with major food manufacturers, flavor houses, and ingredient blenders,” said Erridaoui. “Our ingredients are now part of pilot runs in burgers, snacks, sauces, and more.”

The startup is taking a B2B approach for now, selling ingredients to industry players rather than launching a consumer brand. “The goal is to help manufacturers make better-tasting, more sustainable products – whether that’s a fully plant-based burger or a hybrid meat recipe with less salt and more flavor.”

The funding will support expansion of the sales team to meet demand, particularly in France and across Europe. Several industrial-scale trials are already underway, with broader launches expected as production ramps up.

Investors were drawn to the combination of sustainability, technical novelty, and commercial readiness. “Fungu’it addresses a real friction point in the agri-food industry,” said Juliette Delanoë, Partner at Asterion Ventures. “It’s a breakthrough innovation in a strained market, driven by a team with proven industrialization expertise.”

Guillaume Blanchet of UI Investissement said the company’s impact is both local and global. “Supporting Fungu’it means investing in a project that enhances regional agricultural by-products while tackling global challenges.”

Bruno Rousset, founder of Evolem, echoed the sentiment. “Fungu’it’s commitment to sustainable food and natural ingredients fully aligns with our strategy of supporting innovative, environmentally friendly solutions.”

As demand for clean-label, functional flavors grows, Fungu’it is betting that fungi – and forgotten food waste – hold the key to what comes next.