Money for mushrooms: Fable Food closes in on third fundraising round

Plant-based start-up Fable Food is close to securing up to $25 million in fresh funding, as the alternative meat sector continues to curry favour with meat eaters and vegetarians alike.

The start-up makes meat products out of shiitake mushrooms and counts Grill’d, Guzman y Gomez and Heston Blumenthal as customers. Co-founder Michael Fox, whose previous venture was collapsed fashion start-up Shoes of Prey, told this masthead that Fable Foods had settled on two candidates as potential lead investor – one American and another from the UK – that would provide the majority of the funding and bring on other smaller investors.

Fox said the next step was to negotiate the terms and determine which offer was better aligned with the start-up’s mission and valuation of the business.

“We want investors who have had experience working with high-growth businesses, and know how to work and help businesses like ours to scale,” he said.

If the deal is secured, it will mark Fable’s third round of fundraising. The first was led by Grok Ventures, the personal investment fund of Atlassian co-founder Mike Cannon-Brookes in December 2019, which poured $1.5 million into the start-up. The second was a $6.5 million seed round led by Blackbird Ventures nine months ago.

The new funding would go towards two things: research and development, and current efforts to expand into Singapore, the US and the UK.

“We don’t have any salespeople in the business at the moment – in any markets, even in Australia,” Fox said.

While Fable Food has a small retail presence, its strategy is to target the top end of town by working with celebrity chefs and premium foodservice chains (The Coffee Club and meal kit subscription service Marley Spoon are also customers). Fable is hoping to duplicate the business model abroad.

The new capital would also go towards product development: Fable currently has three patented mushroom products, with plans for more. It would seek to expand its mushroom breeding program and conduct further research into mushroom farming.