Investors support Fungu’it's fermentation-based natural flavors technology

Fungu’it is developing a patented, solid-state fermentation technology that uses filamentous fungi to produce natural, organic and sustainable flavorings. The start-up founded in Dijon, France in 2022, transforms by-products from the food industry into high-value ingredients, through an innovative, circular approach.

With this innovative process which makes use of by-products in the food industry to create flavorings, the company has garnered a €4 million funding round from Asterion Ventures, with participation from Evolem and UI Investissement via Oser BFC. The investment will accelerate industrial production and strengthen Fungu’it’s position in the natural flavorings market.

Fungu’it harnesses the potential of filamentous fungi to transform agricultural by-products—such as flaxseed and sunflower press cakes, or legumes—into rich, complex, and powerful natural flavorings.

The company’s sustainable solid-state fermentation process converts often-overlooked by-products into high-value ingredients. This resource-efficient method significantly reduces water and energy consumption compared to traditional production.

The startup has successfully stabilized two key flagship ingredients:

• A meaty umami flavor specifically developed for plant-based alternatives. Fungu’it enhances the sensory performance and appeal of these products, making them more accessible to consumers and indirectly contributing to the reduction of the environmental footprint of conventional livestock farming.
• A sustainable and innovative chocolate flavor that can reduce the use of cocoa in a recipe by up to 25%. This solution not only lowers dependence on cocoa but also helps curb deforestation and reduce CO₂ emissions linked to intensive cocoa production. Indeed, cocoa farmers often clear tropical forests to plant new trees instead of cultivating existing land, leading to significant biodiversity loss. By partially replacing cocoa with a more responsible alternative, Fungu’it helps preserve ecosystems while addressing the environmental challenges facing the chocolate industry.

“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, ” explains Anas Erridaoui, CEO and co-founder of Fungu’it. 

A strategic market with high growth potential

The global market for natural flavorings is growing rapidly, driven by increasing demand from manufacturers for healthier, more sustainable, and natural solutions. In 2022, the food flavoring industry in France generated €730 million in revenue. This sector offers high gross margins—around 50%—with relatively controlled industrial investment. The increasing shift toward the use of natural products and the reduction of synthetic ingredients creates a favorable environment for innovative technologies like Fungu’it's.

"Our technology revolutionises the creation of natural, sustainable, and high-performance flavorings, while upcycling often wasted by-products. This circular, innovative approach is established as a key driver of transformation for the agro-food sector, moving towards a healthy, long-lasting and affordable diet," said Erridaoui.

A funding round to scale up industrial production

This €4 million fundraising will enable Fungu’it to build an industrial pilot plant with a production capacity of several dozen tons per year, patent and industrialise its process, and develop a unique database from testing hundreds of combinations of strains and by-products. The startup also plans to strengthen its sales team to accelerate the commercialization of its first flavorings, particularly in the fast-growing plant-based alternatives segment.

Fungu’it addresses a real friction point in the agri-food industry: how to do better—more natural, more circular—without compromising on performance. It’s a breakthrough innovation in a strained market, driven by a team with proven industrialization expertise,” said Juliette Delanoë, Partner at Asterion Ventures.

"Supporting Fungu’it means investing in a project with strong territorial and environmental impact, which enhances the agricultural by-products of Bourgogne-Franche-Comté while addressing global industrial challenges," adds Guillaume Blanchet, Partner at UI Investissement.

“Fungu’it’s commitment to sustainable food and natural ingredients fully aligns with our investment strategy in innovative, environmentally friendly, and value-creating solutions,” said Rémi Berthier, Investment Director at Evolem.

Founded in 2022, Fungu’it is developing a patented, solid-state fermentation technology that uses filamentous fungi to produce natural, organic and sustainable flavorings. The start-up transforms by-products into high-value ingredients, through an innovative, circular approach. Based in Dijon, Fungu’it combines scientific, industrial, commercial, and sensory expertise to accelerate the food transition. From the outset, Fungu’it joined the regional incubator DECA-BFC, strengthening its ties with the Bourgogne-Franche-Comté region, therefore benefiting from strategic, local guidance to foster its growth. To learn more:  https://funguit.fr/en/