“The commitments we have from these partners enabled this factory to be built,” Matt Scullin, the CEO of MycoWorks and a materials scientist, told us. He added that the factory will help the company penetrate the fashion and luxury industries “in a real way”.

Many fashion brands have set climate goals and are searching for sustainable substitutes to animal- or plastic-based leather and other textiles with high carbon footprints. The brands’ push has spurred investment in more than 100 start-ups developing these alternatives, according to the Material Innovation Initiative, an industry think tank.

Start-ups focused on so-called next-generation materials raised some US$457 million in 2022, though that was a drop from 2021 in part because of higher interest rates.

MycoWorks’ shift to a commercial-scale operation has been decades in the making, Scullin said. The company has raised US$187 million in funding, a spokesperson told us.

Yet even with MycoWorks’ milestones, the new production will only account for a sliver of the estimated 23 billion sq ft of leather produced globally each year, much of which is used for footwear.

The alternative-materials industry still faces headwinds. Bolt Threads halted production of its alternative leather, made from mycelium and minimal plastics, this year even after landing high-profile partnerships with Stella McCartney and Adidas and raising more than US$300 million since 2009. CEO Dan Widmaier told Vogue Business that funding had dried up but the company is open to selling the technology to make sure its material gets to market.

Yet such challenges haven’t deterred all investors. A start-up called Ecovative that’s making mycelium-based bacon, textiles and packaging recently said it attracted more than US$30 million in a funding round.

Scullin sees a future where MycoWorks’ material, called Reishi, is available beyond the luxury market. He said Reishi is different from its competitors for two reasons: its quality and production process that grows sheets of mycelium in small trays.

“People fall in love with Reishi for the way it feels and the way it looks,” Scullin said. “Sustainability is part of our story, but it is not the story. That’s been a strategic difference between our approach and that of our competitors. Consumers don’t want to sacrifice quality for sustainability, and brands know that.”