French luxury group Kering’s venture investment arm has joined Italian biomaterials start-up Mogu’s latest funding round. The €11 million ($12 million) series A was led by CDP Venture Capital and the European Circular Bioeconomy Fund. The size of Kering’s investment was not disclosed.

The funding round comes on the heels of a challenging year for material innovation. A gloomy economic outlook and rising interest rates has made fundraising more challenging, while a number of high profile start-ups targeting the fashion sector have floundered.

Kering has already worked with Mogu’s mushroom-derived leather alternative. In 2022, Kering-owned Balenciaga released a highly limited run of coats made from the mycelium material.

Mogu, which is planning to change its name to Sqim following the investment, will use the funds to build a demo plant and boost R&D for its mycelium-based products.

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