Meet the Finnish biotech startup bringing a long-lost mycoprotein to your plate

The best-known mycoprotein is probably Quorn, a meat substitute that is soon approaching its 40th anniversary. But Finnish biotech startup Enifer is working on something even older: the patented single-cell, fungal-based protein called Pekilo was originally developed in the 1960s and 1970s – mainly by the local paper industry.

The focus at the time was not on producing an alternative protein for human consumption, as the startup plans – although the original Pekilo product was sold for animal feed. Instead, according to Simo Ellilä, CEO and co-founder of Enifer, paper industry engineers tried to come up with a solution to the pollution caused by factories dumping production waste (“side streams”) into local waterways.

“It actually started with people in the lab realizing that if you left this stuff on the lab bench for a weekend, mold was going to grow – and so that was the ‘ah-ha’ moment,” he explained .

After discovery on a laboratory bench, production of the mycoprotein was developed over about 15 years – with paper industry engineers applying a process of biorefinery and fermentation to grow and harvest the fungus on a commercial scale. But the main purpose was still wastewater treatment. That is why Pekilo fell out of use in the early 1990s when the paper industry switched to incinerating its waste.

The engineering company that developed it also went bankrupt and the knowledge of Pekilo was lost, as Ellilä tells it – “very actively forgotten” – adding a Tolkien-esque touch to the long history of this alt-protein. “Our founding team was made up of biotech scientists, educated and trained in Finland, and we had never heard of this before,” he told JS. “So really well forgotten.”

Someone well remembered. And so Enifer’s biotech founders ended up at Pekilo – leading to their decision to spin off a company from Finland’s VTT Technical Research Center in 2020. The idea: to revive this lost mycoprotein and expand production to obtain food-grade (not just feed-grade) proteins.

“It was actually down to a very senior R&D director, who is already retired – who had worked at Valio, the local dairy company – who kind of remembered this process and thought, ‘Oh, can we use this? ‘” says Ellilä. . “Myself and one of my co-founders came across this public R&D project that this gentleman was involved with. And we found it fascinating – seriously, paper engineers made alternative proteins in the 70s?!”

A lot of old-fashioned detective work followed to find out as much production information as possible. “We started digging up everything we could find. There were still a lot of paper resources if you knew where to look,” he said. “We did a lot of incredible detective work, like literally going through old phone books to find some of these people.”

The motivation driving the founders is clear: alternative proteins are now a much more substantial commercial target in their own right – responding to the growing demand for sustainable alternatives to meat. Enifer is optimistic there is a long-term opportunity to revive Pekilo. In essence: the mycoprotein’s best days may still lie ahead.

First factory fully financed

The startup has just completed a Series B funding round to complete and operationalize its first factory – for a total of €33 million – located in Kirkkonummi, Finland, close to the sea (which provides a source of cooling water to power the digesters the right temperature).

“The fungal metabolism is really active,” Ellilä noted. “It’s like the fungus is on a treadmill there. So it really generates heat and you have to remove that heat.”

Enifer says the plant will be the first commercial plant in the world to produce a mycoprotein ingredient from feedstocks from the food industry’s sidestream – or, put another way, this biorefinery is about converting waste into high-quality protein. (While the fungus that produces Quorn is typically fed with glucose.)

The Series B consists of €15 million in equity financing led by Finnish private equity fund Taaleri Bioindustry Fund I, with follow-on investments from existing shareholders Nordic Foodtech VC, Voima Ventures and Valio (the aforementioned dairy giant).

The Finnish Climate Fund has also provided a subordinated loan of €7 million to support the project. In addition, Enifer has obtained a €2 million climate and environmental loan from Finnvera. It also previously reported a €12 million investment grant for recycling/reuse from Business Finland, which fully financed the first plant.

Once at full scale, the fermentation and processing plant will produce 500 kg of alt protein per hour. It says it expects to start ramping up operations in 2026, but Ellilä confirmed it will take about three years to reach full production capacity. If all goes well, more factories could follow.

One of the main differences with Pekilo for food quality consumption is the side streams used. Wood pulp was well suited for animal feed, but new side streams are needed to increase the usefulness of the product. According to Enifer, waste from the dairy industry – such as lactose – is well suited as a raw material for the fungus, so you understand why Valio is investing.

While the alt protein space can seem quite crowded these days as there are many forms of plant-based and mycoprotein already available, another thing that is relatively new about Pekilo is that it is processed into a dry powder (steam is used to mold to dry after it has been harvested). .

Ellilä says this makes it particularly interesting for the food industry – as an ingredient with a long shelf life that can be easily integrated into existing recipes and processing methods.

The food-grade version of Pekilo also has a mild and neutral taste, making it suitable for a wide range of applications, from savory to sweet. “The food grade product has a very characteristic taste, but we have to do some additional processing to make it suitable for food and then the taste is completely lost,” he noted.

An example product he offers to visitors is a chocolate cake with flour that has been exchanged for Pekilo. Other possible uses include patties, deli meats, and even yogurt and cheese. However, Enifer plans to remain a B2B player; his culinary experiments are purely intended to demonstrate the potential of the mycoprotein to customers in the food industry.

As for price, Ellilä says they want the product to be cheaper than pea protein. This suggests that if successful, Pekilo could nibble at another alt-protein’s market share (although he also notes that there are nutritional differences that could mean using a combination of alt-proteins is too expensive). best).

“What I like to think about is what we want to achieve: try to contribute to reducing the cost of these products and improving the quality of the next generation of plant-based products,” he added.

Applying for approval for new foods

Before Enifer’s mycoprotein can be processed into food for human consumption, the startup will need to obtain regulatory approval for Pekilo as a novel food. So there is a long application process beforehand.

Ellilä says they are preparing an application to submit to regulators in the European Union, and will likely focus on Singapore next, followed by the US.

He sounds confident that they will – “eventually” – get the green light to sell Pekilo as a new human food. “I feel like we have an exceptionally strong case… because a mycoprotein is not entirely new,” he argued.

“It’s a different type of fungus. But still, it’s not something scandalous. It is actually not that distantly related – as an organism – to Fusarium, which Quorn uses. And then there’s mountains of evidence of its safety in pigs, chickens and all kinds of organisms.”

“We have so much scientific material from the past. That is not the case for many other applicants,” he also suggested, adding: “I am sure we will get it eventually.”

Enifer is also developing Pekilo for use in animal nutrition, which in the meantime gives it a market to which it can access. Moreover, the company still takes into account use cases for animal feed – going back to the origins of Pekilo – but the economic situation is more difficult to combine, so partners are needed.

Ellilä says they are in discussions with companies with large amounts of side streams that they would like to upcycle for potential partnerships. “We certainly haven’t given up on pet food,” he said, adding: “We are in discussions with a lot of companies to say, let’s set up a joint venture… and then we don’t have to put in all the capital.”