The best-known mycoprotein is probably Quorn, the meat substitute approaching its 40th anniversary, but Finnish biotech start-up Enifer is developing something even older: its own single-cell fungus-based protein, branded Pekilo, which was originally developed in the 1960s and '70s by the local paper industry.
The focus at the time was not on producing alternative proteins for human consumption, as the startup intended. However, his original Pekilo product was sold as animal feed. Simo Elira, CEO and co-founder of Enifer, said paper industry engineers are instead trying to solve the pollution caused by mills dumping production waste (“sidestreams”) into local waterways. He said he was trying to come up with a plan.
“It basically started when people in the lab realized that if they left this stuff on their lab bench over the weekend, it would start to grow mold. That was their 'aha' moment,” he explained.
After its discovery on the laboratory bench, the production of this mycoprotein was developed over a period of about 15 years, when paper industry technicians applied a biorefining process to cultivate and harvest the fungus on a commercial scale using fermentation, but its main purpose remained wastewater treatment, so Pequilo fell out of use in the early 1990s when the paper industry switched to incinerating its waste.
The engineering company that developed it went bankrupt, and knowledge of Pekiro was lost. In Elira's words, it was “actively forgotten.” This adds a Tolkien-esque ring to the long history of alternative proteins. “Our founding team are biotech scientists, trained and educated in Finland, and had never heard of this,” he told TechCrunch. “So it was really forgotten.”
But someone remembered, and that’s how Enifer’s biotech founders met Pekilo and made the decision to spin the company out of Finland’s VTT Technical Research Centre in 2020. The idea was to revive the lost proprietary mycoprotein and scale up production to produce food-grade (and not just feed-grade) protein.
“Actually, thanks to a senior R&D director who is now retired, someone who worked at a local dairy company, Valio, remembered this process and thought, 'Maybe we could use this?'” Ellilä recalls. “One of my co-founders and I came across this public R&D project that this gentleman was involved in, and we thought it was really interesting. I can't believe they were making alternative proteins in the 1970s!
“We thought that was really interesting: Seriously, paper engineers were making alternative proteins in the '70s?”
A lot of old-fashioned detective work ensued to recover as much production information as possible. “We started digging out everything we could find. There were still plenty of paper sources out there if you knew where to look,” he said. “We've done a lot of incredible detective work, literally going through old phone books and finding some of these people.”
The motivations that drove the founders are clear. Alternative proteins have become a much more substantial commercial objective in their own right, as demand for sustainable alternatives to meat is increasing. Enifer is bullish that there is a long-term chance to revive Pekiro. In essence, mycoprotein's best days may be yet to come.
Pekiro Mycoprotein as an ingredient (Image credit: Iiro Muttilainen)
First factory fully funded
The startup has just closed a Series B funding round to complete and commission its first factory (total cost: 33 million euros) in Kirkkonummi, Finland, near the sea (cooling to maintain fermenter tanks) Provide a water source) at an appropriate temperature).
“Fungal metabolism is very active,” Elira points out. “It's like the fungus is on a treadmill. So it's actually generating heat, and we need to remove that heat.”
Ennifer said the plant will be the world's first commercial plant to produce mycoprotein ingredients from raw materials that are by-products of the food industry. In other words, this biorefining business turns waste into high-quality protein. (Fungi that produce Quorn, on the other hand, typically feed on glucose.)
The Series B consists of €15 million in equity funding led by Finnish private equity fund Taaleri Bioindustry Fund I, with further investment from existing shareholders Nordic Foodtech VC, Voima Ventures, and Valio (the aforementioned dairy giant).
The Finnish Climate Fund has also extended a junior loan of €7 million to support the project. Additionally, Enifer has secured a climate and environmental loan of €2 million from Finnvera. The company also previously reported that it had secured a recycling/reuse investment grant of €12 million from Business Finland, making the first factory fully funded.
At full scale, the fermentation and processing plant will produce 500 kg of alternative proteins per hour. They expect to be able to ramp up operations in 2026, though Elira acknowledged it will take about three years to reach full capacity. If all goes well, more plants could follow.
First Pekiro factory (Image source: Anssi Rantasalo)
One of the main differences with food-grade Pequilo is the by-products used: wood pulp was suitable for animal feed, but new by-products are needed to make the product more useful. Ennifer says that waste products from the dairy industry (such as lactose) are a good source of feed for the fungus, and it's easy to see why Valio is investing.
The alternative protein field seems pretty crowded these days, with a variety of plant- and fungal-derived proteins already available, but another relatively new aspect of Pequilo is that it is processed into a dry powder (the fungus is steam-dried after harvesting).
Elaira says it is of particular interest to the food industry as an ingredient with a long shelf life that can be easily incorporated into existing recipes and processing methods.
Food-grade pequilo also has a mild, neutral flavor, making it suitable for a wide range of applications, from savory to sweet foods. “Feed-grade products have a very distinctive flavor, but to make them food-grade requires additional processing and the flavor is completely lost,” he noted.
He says one of the sample products he'll offer visitors is a chocolate cake, made using wheat flour instead of pekilo. Other potential uses include pates, cold cuts and even yogurt and cheese. But Ennifer intends to remain a B2B player; its culinary experiments are purely aimed at demonstrating the potential of mycoprotein to food industry customers.
As for pricing, Elira says he wants to make the product cheaper than pea protein, suggesting that if successful, Pequilo may be able to chip away at market share from other alternative proteins (though Elira notes that because of nutritional differences, it may be best to use alternative proteins in combination).
“I think what we want to achieve is to contribute both to lowering the cost of these products and to improving the quality of the next generation of plant-based products,” he added.
Applying for a new food clearance
Before folding Enifer's mycoprotein into food for human consumption, the startup needs regulatory approval for Pekiro as a novel food. Therefore, there is a long application process ahead.
Ellera said the company is preparing to file with regulators in the European Union and will likely target Singapore next, then the United States.
He seems confident that approval to sell Pequilo as a new human food will “eventually” be granted: “We feel that we have an exceptionally strong case… because mycoprotein is not completely new,” he argued.
“It's a different fungus, but it's still not that outrageous. Actually, as a living thing, it's not all that distantly related to the Fusarium that Quorn uses. And in pigs and chickens and all sorts of living things… There's a lot of evidence that it's safe.”
“We have a tremendous amount of scientific material from that time, which is not the case for many other applicants,” he suggested, adding, “I am confident that we will eventually get it.” he added.
Enifer is developing Pequilo for pet food, which will give it market access for the time being, and is also looking at using it in animal feed, going back to Pequilo's origins, but that's economically difficult to achieve and so it will need a partner.
Ellera said he is exploring the possibility of partnering with companies that have large amounts of side streams they want to upcycle. “We're not giving up on animal nutrition by any means,” he said, adding: “We're in talks with a number of companies to do joint ventures… that would mean we don't have to put in the full capital.”