Mushrooms For Climate: Urban Fungi Startup Tupu Reels in $3.2M in Seed Funding

Berlin-based agtech startup Tupu has raised $3.2M in a seed funding round to grow mushrooms directly in cities. The firm combines its patent-pending modular farming tech with bioscience, robotics and artificial intelligence to offer locally grown gourmet mushrooms at a competitive price.

With a funding round co-led by FoodLabs and Zubi Capital – alongside Clear Current Capital, FoodHack, IT-Farm, CoastCap and angel investors – Tupu hopes to “redefine mushroom cultivation”.

Mushrooms can be grown anywhere (even indoors) and year-round, which makes them immune to supply chain disruptions. Plus, they’re an ecological marvel, with a lower carbon footprint, water consumption and land use than most vegetables. They’re packed with umami – a key aspect of what makes food taste great – and nutrients, and make for a great source ingredient for alt-protein.

The problem, however, is that while they can be grown anywhere, they’re not. Mushroom transportation is, as Tupu puts it, “inefficient and unsustainable”, with distances of over 7,000km resulting in compromised taste, shorter shelf lives, reduced nutritional attributes, and an increased carbon footprint.

So, with the demand for sustainable and locally produced food – forgive me – mushrooming, how do we overcome this obstacle? For Tupu, the answer lies in urban farms. Co-founded in 2021, it blends its modular farming system with bioscience, robotics and AI to grow organic gourmet mushrooms directly in cities.

“Unlike plants, mushrooms have always been cultivated indoors, yet in an inefficient manner, and we’re leapfrogging the current state of the industry with our technology by 50 years,” says co-founder and COO Daniel Lock. Tupu opened its first urban farm last November, which is capable of growing three tons of mushrooms per month, and it’s expanding the facility to increase its capacity to five tons a month. The company’s tech elements include Internet of Things devices distributed throughout the farm to integrate millions of data points, as well as advanced camera vision artificial intelligence.

“Controlled environment farming is a key technology to make our food supply chain climate resilient. We’re excited about Tupu as they are able to make indoor farming economically viable,” explains Till Hoelzer, principal at FoodLabs.

How Tupu grows mushrooms in cities

Tupu’s mushrooms are cultivated in three major steps. The first involves the substrate, where it maximises yields, reduces growth time and cultivates healthier mushrooms via bioscience and bioengineering techniques. Next is the fruiting stage, where it leverages IoT and AI camera vision solutions to precisely optimise the climate and growth recipes, while also forecasting yields.

Finally, during harvest, Tupu lowers the associated labour costs and ensures the timely and efficient harvesting of fresh products with automation. The startup uses what it calls the industry’s first harvesting robot for gourmet mushrooms. Are there any concerns about robotic errors? “Dealing with organisms entails variations in growth and morphology, such as diverse shapes, structures and sizes,” explains co-founder and CEO Eldad Arnon.

“Precision-tuning the robotic arm for harvesting all species presents a notable challenge. To address this, we employ data-driven harvesting techniques as a solution. Our plan includes integrating the harvesting robot into our production process early next year,” he says, adding: “Our vision does not involve robots replacing humans entirely; instead, they will serve to facilitate and simplify processes.”

Tupu says its digitalised and automated value chain helps tackle key agrifood challenges, from labour scarcity and yield improvement to spatial efficiency. “This technology will allow us to maintain local production while simultaneously decreasing labour costs, making our products price-competitive,” says Arnon.

While he remains tight-lipped on exact prices, Arnon outlines Tupu’s mission to offer nutrient-rich food at budget-friendly rates. “Even though we offer fresh, locally and sustainably grown products that guarantee superior taste and enhanced nutritional value, our pricing remains competitive,” he notes.

From Michelin-starred chefs to local supermarkets

Tupu’s mushroom portfolio includes king oysters, grey oysters, shiitakes, lion’s manes and yellow oysters, but it’s not stopping there. “We are continually expanding our portfolio with new varieties, like coral tooth, pink oyster, and nameko while concurrently exploring the cultivation of species that cannot be grown indoors at our Wageningen lab,” says Arnon.

Each variety of mushroom has its own growth cycle. “Shiitake and oyster mushrooms typically take around a week, while lion’s mane and king oyster mushrooms require approximately two weeks to mature,” says Arnon. “We are fine-tuning these growth cycles through our climate-controlled software to align with market demand, enhance our operational efficiency, and minimise food waste.”

Tupu’s mushrooms have already appeared at some wholesalers, foodservice operators and restaurants in Berlin. These include Michelin-starred eatery Horváth (which uses the king oysters for a vegan foie gras), creative brewery and restaurant BRLO (whose brewer’s spent grain is used by Tupu for substrate experiments), as well as upscale caterers like Cookies and Donau101, among others The startup will soon tap into the B2C segment by introducing its mushrooms at retailers across Berlin. And it’s exploring a direct-to-consumer model too.

“While the vertical farming sector has been challenging recently, in particular for leafy greens and other energy-intensive crops, urban farming will play a key role in our future food system,” says Lock. “Mushrooms offer immense potential across various sectors – food is just the beginning.”