A start-up called Modern Meadow has developed a way to brew leather in a lab, without harming any animals.

Here's how it works, according to Modern Meadow CEO and founder, Andras Forgacs:

"We have engineered a strain of yeast — like a cousin of what you'd use to brew beer — which can produce collagen through fermentation. Collagen, which is found in animal skins, is the main biological building block of leather. We assemble it into a range of materials that become our 'Zoa bioleather.'"

In recent months, Modern Meadow has refined its technology, so that its leathers can be brewed on the equipment found in large commercial fermentation facilities that make food and medical-grade products for the masses.

Chief Technology Officer Dave Williamson told CNBC that Modern Meadow has also struck a joint development partnership with European chemicals giant Evonik that will help it scale production, and make Zoa bioleathers available to designers of luxury goods.

The company isn't yet disclosing the names of designers who have access to its leathers, which feel and even smell like leather made from animal skins. However, Forgacs said Modern Meadow has been fielding inquiries from hundreds of designers across fashion, sports, automotive and other industries.

Funded by Li Ka-shing's Horizons Ventures, Iconiq Capital, Breakout Ventures (a Peter Thiel affiliated fund) and Temasek, among others, Modern Meadow is poised to disrupt the $100 billion leather industry.