Celebrity-backed vegan leather startup to tap muni market in test of risk appetite
Though alternative-materials firms are uncommon borrowers in the muni market, investors are familiar with project financings for private companies pursuing industrial-scale innovation, such as bio fuels or recycling technology. Still, a wave of recent defaults in the sector is prompting investors to dig deeper into credits.
'They're not hiding the fact that this is a speculative investment with a high degree of risk,' said Jeffery Timlin, managing partner and lead portfolio manager for Sage Advisory Services' municipal strategies. 'This is something that people are going to have to do their due diligence on.'
MycoWorks' clients include French furniture company Ligne Roset. One of its most significant customers is Curtidos Badia, a Spanish tannery that sells leather to luxury brands. Badia has the right to purchase 70% of the materials produced at MycoWorks' South Carolina facility.
The factory is currently operating at just 22% of its capacity threshold, according to the offering documents.
Startup operations began in September 2023, but production was disrupted in January 2024 by an aggressive strain of fungi that began attacking the mushroom roots. The infection forced a full shutdown for most of the year, during which the facility underwent 'thorough cleaning and upgrading of procedures,' according to the prospectus. Operations resumed in October.
The company says it has 'essentially eliminated contamination issues' since implementing the new protocols, per the investor presentation.
The incident coincided with the company's original financing timeline. MycoWorks had initially planned to sell municipal bonds in late 2023 or early 2024, with Wells Fargo & Co. lined up as underwriter, according to a state agency that had to authorize the sale of the bonds at the time. That deal was shelved; the upcoming transaction will instead be led by JPMorgan Chase & Co.
MycoWorks did not respond to requests for comment. Representatives from Wells Fargo and JPMorgan declined to comment.
Despite the risks, Timlin of Sage Advisory expects the deal to draw interest. High-yield municipal issuance has been scarce this year, while money managers have continued to amass capital to deploy in the sector.
JPMorgan strategists estimate that high-yield issuance so far in 2025 accounts for just 7% of overall tax-exempt supply.
Mohammed Murad, head of municipal credit research for PT Asset Management, said project finance deals have seen mixed reception in the primary market this year. High-yield offerings more broadly have been well received due to strong investor demand, he said.
'Project finance deals vary widely in terms of risk acuteness, but also the types of risks inherent in each of these deals,' Murad said. 'No two deals are alike.'
MycoWorks is expecting about $5 million in revenue for the second half of 2025 and nearly $22 million for 2026, based on base-case projections. It's offering documents outline a long list of risks, including the potential for future contamination events and changes in consumer behavior.
Much of the demand for alternative leather products is being driven by millennial and younger generations of consumers concerned with the environmental impact of traditional leather, the company notes. But those preferences could shift in 'unexpected ways,' it adds, influenced by internet and social media trends.
'Innovation is expensive, time-consuming and may not be successful,' the prospectus states.
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
AFP
3 hours ago
- AFP
Posts falsely claim Toyota has unveiled a water-powered engine
'In a move that will shake up the global auto industry, Toyota has just unveiled a water-powered engine powered by hydrogen created through electrolysis, emitting only water vapor! No lithium. No charging stations…With this bold move, Toyota isn't just competing with EVs — they're declaring the end of the battery era,' reads a Facebook post shared more than 250 times since it was published on June 28, 2025. The post contains a collage of two photos, one showing a man in a suit appearing to present the water engine and the other of a Toyota-branded engine, with a photo of Chinese president Xi Jinping superimposed. Image Screenshot of the false Facebook post, taken on August 11, 2025 AFP Fact Check debunked similar claims in French and Bulgarian. In the race for zero-emission vehicles — particularly between electric and hydrogen cars — the hope that water could one day replace fuel is a popular idea that has resurfaced in recent years. But this hypothesis has never been supported by solid scientific evidence, as AFP Fact Check previously explained in this debunk. The claim that Toyota is developing a water-powered engine is false. Hydrogen vehicles Toyota has not made any public announcements "unveiling" a water engine, as the post claimed. "We are not developing anything that could be described as a 'water engine'," Jean-Yves Jault, a representative of the Toyota Motor Corporation, said in an email to AFP on July 23. Jault called the claims circulating online "false information" and referred to a Forbes article that refutes the rumor (archived here). Toyota produces vehicles that use hydrogen as fuel. These cars, like the Mirai model, are fueled at specialised stations and equipped with lithium-ion batteries to store and manage energy (archived here). Robert Rapier, a chemical engineer and the author of the Forbes article, explained that "water as the power source for a vehicle is nonsense'. 'Although water can be an energy source, it is not a fuel. Water is actually the combustion product of hydrogen, which is a fuel. Water is produced when hydrogen is burned. Water can function as an energy source in some situations,' he added. Electrolysis process Electrolysis is a process where an electric current is passed through a substance to trigger a chemical reaction, splitting water molecules (H₂O) into hydrogen (H₂) and oxygen (O₂). The process requires a significant amount of electricity and is only effective when there is a stable energy source (archived here). Electrolysis does not produce energy; it consumes it to produce hydrogen, which is then used to power fuel-cell vehicles. Therefore, there must be a source of electricity, such as a battery, for electrolysis to work inside a car engine. 'But such a scenario would be inefficient, because each energy conversion stage involves efficiency losses. That's basic thermodynamics. Rather than use a battery to produce hydrogen via electrolysis, which then has to be converted into energy to power a car, it would be far more efficient (and practical) just to use the initial electricity directly without the conversion steps,' Rapier wrote in his article. Image Graphic explaining the steps necessary to produce green hydrogen, a source of energy seen as an option to decarbonize some heavy-polluting industries (AFP / Tatiana MAGARINOS, Gustavo IZUS) Several experts also confirmed this process to AFP Fact Check. Professor Plamen Punov of Sofia Technical University, who supervises student projects on hydrogen fuel cells, noted that the hydrogen used as fuel is not produced directly inside the vehicle (archived here). 'All these cars produce electricity in fuel cells that use pure hydrogen, pre-charged in bottles. I am not aware of such a vehicle existing, and theoretically it would be extremely inefficient and impractical," he wrote in an email to AFP Fact Check on July 7, 2025. Professor Boriana Tsaneva, a PhD in chemistry at the same university, also confirmed to AFP Fact Check via email that 'it is technically possible to use electrolysis to harness the residual energy of a moving vehicle', but this option is 'economically unreasonable'. Aside from the high costs and additional weight from installing an electrolysis cell and other components on board, Tsaneva added that the explosive gas mixture produced would be incredibly dangerous. This mixture cannot be stored safely and needs to be added immediately after production, she noted. Furthermore, the usable energy produced from burning the gas mixture is negligible. Water as coolant, not fuel The confusion likely stems from a patent filed by Toyota in 2023 for a hydrogen engine with a water-cooled system. In this design, water is used as a coolant instead of the traditionally used air, not as a fuel (archived here). This system better controls the high temperatures created by hydrogen combustion. By lowering temperatures, manufacturers can use lighter materials in the combustion chambers and cylinders, thus improving engine efficiency and reducing weight. The Toyota Mirai follows the manufacturer's current technology: a hydrogen fuel cell that generates electricity to power an electric motor (archived here). Hydrogen is stored in reservoirs under high pressure, and the vehicle is recharged at specialised stations. The only byproduct of converting hydrogen into electricity is water vapour. The car does not have an electrolysis system to produce hydrogen from water. It is equipped with a lithium-ion battery. Toyota also uses electrolysis to produce hydrogen at some of its facilities, but this process takes place outside the vehicles, not inside them (archived here). As part of a long-term strategy toward carbon-neutral vehicles, Toyota is taking a multi-pronged approach. This includes the development of hydrogen fuel cells, hydrogen-powered combustion engines, and solid-state batteries, which could offer better performance for safety, range and power (archived here). Battery-powered electric vehicles dominate the zero-emission transport market, due to their affordability, higher fuel efficiency, and growing charging infrastructure (archived here). However, some automakers, including Toyota, are considering hydrogen-powered cars as a complementary solution for heavy-duty transportation and long-distance travel. Their large-scale development remains limited by high production costs and a still-underdeveloped refuelling network. Most analysts agree that the future of zero-emission mobility will rely on a mix of technologies: Batteries will remain the preferred option for passenger cars, while hydrogen could play a strategic role in specific sectors, such as long-haul trucks, heavy-duty vehicles and certain industrial uses (archived here). AFP has debunked other claims about the existence of water-powered cars here and here.
Euronews
6 hours ago
- Euronews
Greece prepares to launch its largest data centre yet
Greece is preparing to open its largest data centre yet, amid a boom in global demand driven largely by artificial intelligence (AI). On Tuesday, the energy and industrial company Metlen said it had delivered the new facility to Digital Reality, which owns more than 300 data centres worldwide. Called Athens-3 (ATH3), the new centre was built at an old industrial site in the town of Koropi, not far from Athens International Airport. The 8,600 square metre facility offers cloud services and data storage and management, and will serve Greece, southeastern Europe, and beyond. The rise of AI has spurred a race to build data centres that can provide the enormous computer power needed to train and use these models. In Europe, demand is projected to rise threefold by 2030, according to an analysis from McKinsey. In Greece, the launch of ATH3 represents the government's latest foray into these advanced technologies. "I have not hidden my ambition," Prime Minister Kyriakos Mitsotakis said at the inauguration of the ATH3 foundation in 2022. "In five years, the technology sector will contribute 10 per cent to our country's GDP". The ATH3 data centre adds to Digital Reality's existing facilities in Greece, including Athens-1 (ATH1), Athens-2 (ATH2), and Heraklion-1 (HER1). But the company is not Greece's only player in this space. Late last year, the French firm DATA4 held a ceremony for its new campus in Peania, which is also east of Athens. The ceremony, which was organised with the support of the Franco-Hellenic Chamber of Commerce and Industry, took place two months after DATA4 announced an investment of more than €300 million. DATA4 CEO Olivier Micheli said that investment is part of the company's plan to invest €7 billion in Europe by 2030, which would make it the bloc's leading data centre provider. Beyond France and Greece, it also operates in Italy, Spain, Poland, and Germany. The Peania data centre campus will be built on 75 acres of land. It is expected to be up and running by early 2027. The group estimates that by 2030 it will have created more than 7,000 permanent jobs on its campuses in Europe and more than 500 permanent jobs on its Greek campus.
Fashion Network
21 hours ago
- Fashion Network
S&P Global revises credit outlook for Gucci owner Kering to negative from stable
S&P Global has revised its credit outlook for luxury goods group Kering S.A. to negative from stable, the ratings agency said on Monday, after sales of Kering's Gucci brand and other products declined in the first half of the year. In a report on Kering's investment grade credit rating, S&P analysts highlighted weakening consumer demand for the French group's luxury apparel across key markets, most notably a 22% year-on-year decline in revenue in the Asia-Pacific and China. The analysts added that Kering had underperformed peers such as LVMH, Dior and Hermes so far this year. Sales of Kering's flagship Gucci brand, which made up over half of its core earnings (EBITDA) last year, fell by a quarter in the first half of 2025, the analysts added. S&P maintained Kering's long-term issuer credit ratings at BBB+, which lies toward the lower end of the high-grade ratings spectrum. "The negative outlook reflects Kering's reduced rating headroom stemming from ongoing pressures in its operating performance, execution risks associated with the company's turnaround initiatives, amid a subdued industry environment," the analysts wrote. Kering in June announced it appointed as its new CEO Luca de Meo, former CEO of French automaker Renault Group, who will take office in mid-September.
