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Why Mushroom Leather (and Other New Materials) Are Struggling to Scale

Late last month, leading materials start-up Bolt threads said it had paused operations for its leather alternative Mylo. The company’s struggle to raise funds points to deeper challenges for the sector, writes Kenneth Pucker.
A model holds a black square of Mylo, a mushroom-based leather alternative made by Bolt Threads alongside images of samples of the material.
Bolt Threads' mushroom-based leather alternative Mylo attracted large sums from investors and the attention of big brands, but the company paused operations last month after struggle to attract fresh funding. (Bolt Threads via Instagram)
  • Ken Pucker

Introducing a new expert opinion column by ESG advisor and educator Kenneth P. Pucker on sustainability matters.

Were one to judge the progress of sustainable fashion by counting press releases for new bio-based materials, the industry would pass with flying colours.

Biofabricated spider silk, fermented seaweed fibres and fruit, vegetable and fungi-based leather alternatives are but a few of the inventions pitched as game-changing eco-solutions by big brands and big investors.

There are reasons to be excited; fashion will need lower-impact materials to meet growing demands from consumers, regulators and investors to cut the industry’s environmental impact.


Today, more than two thirds of fashion emanates from fossil fuel inputs, and heaping piles of scarcely worn shirts and shoes are poised to outlive purchasers’ grandchildren in landfills. And even natural materials like leather or wool have a hefty environmental footprint and are often coated with synthetic chemicals and plastic finishes to ensure performance and durability.

But while credit is due to the creative and courageous innovators and investors leading efforts to develop alternatives, attempts to scale far-out concepts into market-ready solutions have struggled.

Last week, prominent start-up Bolt Threads announced a pause in production of its much-hyped mushroom-based leather alternative Mylo, the result of difficulties raising new funds.

The news caught many by surprise, especially given Bolt’s pioneering status and fundraising prowess.

The company gained early traction thanks to collaborations with Stella McCartney. Since its founding in 2009, the company has raised at least five rounds of funding summing to over $330 million. Its backers include a novel consortium of brand partners including Stella McCartney, Adidas, Lululemon and Kering, who all committed to develop products containing Mylo.

Bolt Threads blamed the pause in Mylo production on a challenging macroeconomic climate that “has made it increasingly difficult to secure necessary capital to support the scale up of emerging technologies.” Given Bolt’s compelling partner brands and the over $450 million of capital invested in next-gen materials in 2022 alone, it is likely this was not the only reason.

Indeed, the sudden news points to broader challenges that also face other material innovators seeking to up-end the dominance of leather, polyester, and nylon.

The Power of Incumbents

Leather has been around for thousands of years and chrome tanning — a faster, cheaper alternative to traditional methods that helped develop the production of leather goods at scale — was invented over a century ago. Since then, billions of dollars have been invested in perfecting processes and driving down costs. Such advances aside, the material has properties (such as its ability to improve with age) that are very hard to replicate.


Some of these same elements apply to another dominant fashion material input: polyester. Introduced over 75 years ago, the polyester supply chain has also been tuned to deliver abundant, consistent supply at low cost. At the same time, years of research and development have produced polyester variants that deliver performance characteristics that are a challenge to match, including consistency, availability, stretch, strength or moisture management.

Notwithstanding some brands’ genuine desire to reduce their environmental footprint and innovate, the process of replacing existing materials with new products can be daunting and plagued by labyrinthian approval processes.

Even trickier, contrary to the cheery survey data, there is no compelling empirical evidence that consumers will pay more for “sustainable” fashion. That means margin pressures most often rule out expensive new ideas with little credit given for reduced environmental impact. As a result, innovators are either forced to sell at a loss or are restricted to pilot programs, stymying efforts to prove the viability of their products, scale production and reduce costs.

The Funding Formula

Compare the number of venture capital firms funding software to the number of venture firms specialising in material innovation or fashion. There are far fewer.

The reasons for the chasm are structural. Once a software solution is invented, the marginal cost to distribute the second, third and one millionth sale are close to zero. By contrast, once a new material is invented, the marginal costs for subsequent units are nearly the same. It is only with learning and scale that costs begin to decrease.

At the same time, building the capacity to produce new materials often requires considerable capital expenditure to build out infrastructure. These costs do not exist for software products. While some fashion companies, including H&M Group and Nike, invest in new environmentally preferred solutions, corporate support for new ventures is small relative to the need.

Too Much Hype

Mushrooms, pineapple, cactus, and coconut leathers make for dramatic headlines. Often, however, the buzz has been bigger than the impact.

A lack of disclosure — and frequently, diligence — has made it hard to understand how new materials really measure up on sustainability. For example, though plant-based alternative leathers can generate fewer carbon emissions as compared to cow leather, most include synthetic polymers (AKA plastics) to add strength and durability. As a result, they come with other environmental challenges (such as biodegradability) that are associated with the least readily degraded component of the product. Mylo, for instance, includes plastic.


These trade offs are typically directly related to efforts to ensure innovations can compete on quality and performance as well as impact. Pushing products to market before they are ready on all counts risks the credibility of the whole sector.

Does It Matter?

Though materials are the most visible manifestation of a product, they do not represent the bulk of a garment’s environmental impact.

In fact, less than one quarter of an apparel item’s carbon footprint comes from raw materials, while over 70 percent of emissions come from the processing and production, according to analysis by the Apparel Impact Institute and World Resources Institute. As such, if decarbonisation is the goal, it would make sense to reallocate the billions spent on material innovation to the gritty work of replacing coal-fired steam boilers in many less developed countries. Credit to Apparel Impact Institute for leading this vital work.

This does not mean that innovation should stop. Instead, an industry committed to reducing its environmental footprint ought to:

(1) Encourage partnerships between new materials developers and existing suppliers to accelerate innovation and streamline spending. For instance, leather manufacturer Ecco Leather has partnered with mycelium-based materials start-up Ecovative in a novel tie up designed to leverage existing infrastructure to bring new innovations to market.

(2) Actively endorse regulation to force companies to pay for social and environmental costs. Efforts to make brands pay to manage clothing waste through so-called Extended Producer Responsibility schemes would be a step in the right direction, if coupled with ecomodulation fees (that penalise worse material choices based on their environmental impact) and appropriate compensation for the countries in the global south where old clothes currently end up.

(3) Accelerate financial support for the work of the Apparel Impact Institute and others committed to supporting suppliers’ efforts to decarbonise.

(4) Fund blended finance partnerships to accelerate targeted grid transitions to cleaner forms of energy in countries with deep fashion supply networks.

These strategies will yield far more impact than yet another press release announcing the acceptance of a marine macroalgae jacket into a museum collection.

Kenneth P. Pucker is a professor of practice at the Tufts Fletcher School. Ken worked at Timberland for 15 years and served as chief operating officer from 2000 to 2007.

Further Reading

The Truth About ‘Vegan Leather’

Leather alternatives have been boosted as eco-innovation and dismissed as mere plastic, but the truth is more complicated than that and demands clearer marketing to avoid misleading consumers.

Would You Buy a Mushroom Handbag?

For the first time, brands including Stella McCartney, Balenciaga and Hermès are bringing products made of buzzy mushroom-based materials to market, a critical test for whether the next-generation fabrics could one day hit the mainstream.

The Start-Ups Fashion Is Still Willing to Bet On

A grim economic climate has tempered enthusiasm for risky investments, but fashion companies and executives like H&M, Kering and Stella McCartney still see opportunity in start-ups pursuing sustainability solutions.

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