The most well-known mycoprotein is probably Quorn, a meat substitute that is nearing its 40th anniversary. However, the Finnish biotech startup Enifer is reintroducing something even older: Its proprietary single-cell fungus-based protein, known as Pekilo, was originally created in the 1960s and ’70s — by the local paper industry.

Back then, the focus was not on producing an alternative protein for human consumption, as the startup intends to do now — although the initial Pekilo product was sold for animal feed. Instead, according to Enifer CEO and co-founder Simo Ellilä, the engineers in the paper industry were attempting to address pollution caused by mills dumping production waste (“sidestreams”) into local waterways.

“It basically started from the fact that people in the lab realized that if you left this stuff over the weekend on the lab bench it would start to grow fungus — and so that was like the ‘ah-ha’ moment,” he explained.

After its discovery on a lab bench, the production of the mycoprotein was developed over a period of 15 years — with paper industry engineers applying a process of biorefining and using fermentation to grow and harvest the fungus at a commercial scale. However, the primary goal was still waste-water treatment. This 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 knowledge of Pekilo was lost, as Ellilä explains it — “very actively forgotten” — adding a touch of mystery to this alternative protein’s long history. “Our founder team were biotech scientists, trained and educated in Finland, and we had never heard of this thing,” he told TechCrunch. “So, really well forgotten.”

However, someone remembered. That was how Enifer’s biotech founders stumbled upon Pekilo — leading to their decision in 2020 to establish a company from the VTT Technical Research Centre of Finland. The concept: revive this lost proprietary mycoprotein and expand production to generate food-grade protein, not just feed-grade.

“It was actually thanks to a very senior R&D director, who’s already retired — who had worked at Valio, the local dairy company — who kind of remembered this process and was thinking, ‘Oh, could we utilize this?’” recounted Ellilä. “Myself and one of my co-founders came across this public R&D project where this gentleman was involved. And we thought it was fascinating — seriously, paper engineers were making alternative proteins in the ’70s?!”

“A lot of old-school detective work followed to recover as much production information as possible. ‘We started digging up everything we could find. There was still a lot of paper sources if you knew where to look,’ he said. ‘We’ve done a lot of incredible detective work — like we’ve literally gone to old phone books finding some of these people.’”

The motivation driving the founders is clear: Alternative proteins are a much more substantial commercial end now, with a growing demand for sustainable alternatives to meat. Enifer is optimistic that there is a long-term opportunity to resurrect Pekilo. Essentially, the mycoprotein's prime days may still be ahead.

First factory fully funded

The startup has recently completed a Series B funding round to finalize and operate its first factory — with a total cost of €33 million — situated in Kirkkonummi, Finland, near the sea (to provide cooling water for fermenter tanks).

“The fungal metabolism is really active,” Ellilä pointed out. “It’s like the fungus is on a treadmill in there. So it’s really generating heat and you need to remove that heat.”

Enifer claims that the factory will be the world’s first commercial plant to produce a mycoprotein ingredient from sidestream raw materials of the food industry — essentially, this biorefining business revolves around converting waste into high-quality protein. (As opposed to the Quorn-producing fungus, which is typically fed with glucose.)

The Series B funding includes €15 million in equity financing led by the Finnish private equity fund Taaleri Bioindustry Fund I, with additional investments from existing shareholders Nordic Foodtech VC, Voima Ventures, and Valio (the aforementioned dairy company).

The Finnish Climate Fund has also provided a €7 million junior loan to support the project. Additionally, Enifer has secured a €2 million Climate and Environmental Loan from Finnvera. It had previously received a €12 million recycling/reuse investment grant from Business Finland, making its first factory fully funded.

Once operating at full capacity, the fermenting and processing plant will produce 500kg of the alternative protein per hour. The company anticipates starting operations in 2026 and estimates that it will take approximately three years to reach full production capacity. If successful, more factories could be established.

One of the significant differences of Pekilo for food-grade consumption is the use of sidestreams. Wood pulp was suitable for animal feed, but new sidestreams are needed to enhance the product's versatility. Enifer suggests that dairy industry waste, such as lactose, works well as a feedstock for the fungus, which explains Valio's investment.

While the alternative protein market may seem crowded with various forms of plant-based and mycoprotein products, Pekilo stands out for being processed into a dry powder (steam is used to dry the fungus after harvesting).

Ellilä mentions that this makes it particularly appealing to the food industry — as a long-lasting ingredient that can easily be incorporated into existing recipes and processing methods.

The food-grade version of Pekilo also boasts a mild and neutral flavor, making it suitable for a wide range of uses, from savory dishes to sweet treats. “The feed-grade product does have a very characteristic flavor, but we need to perform additional processing to make it food-grade, and there, the flavor is completely eliminated,” he explained.

One of the sample products they offer to visitors is a chocolate cake where flour is replaced with Pekilo. Other potential applications include patties, cold cuts, and even yogurts and cheeses. Enifer intends to remain a business-to-business player, with culinary experiments serving to showcase the mycoprotein’s potential to customers in the food industry.

Regarding pricing, Ellilä states that they aim for the product to be more cost-effective than pea protein, suggesting that if successful, Pekilo could capture a portion of the alternative protein market share. However, he also notes that there are nutritional differences that may warrant using a combination of alternative proteins for optimal results.

Applying for novel food clearance

Before Enifer can incorporate its mycoprotein into human food, the startup must obtain regulatory clearance for Pekilo as a novel food. This entails a lengthy application process that lies ahead.

Ellilä mentions that they are preparing an application to submit to regulators in the European Union, with plans to target Singapore next, followed by the U.S.

He expresses confidence that they will eventually receive approval to sell Pekilo as a novel human food. “I do feel that we have an exceptionally strong case… because a mycoprotein is not entirely new,” he argues.

“It’s a different species of fungus. But, still, it’s not something outrageous. It’s actually not very distantly related — as an organism — to Fusarium, which Quorn uses. And there’s plenty of evidence of its safety in pigs, chickens, and various other organisms.”

“We have a lot of scientific material from the past. This is not the case for many other applicants,” he adds, confidently stating, “I’m sure we’ll get it eventually.”

Enifer is also developing Pekilo for use in pet foods, providing a market they can access in the meantime. Additionally, they are still considering applications for animal feed, echoing Pekilo’s origins; however, partnerships would be necessary due to the challenging economics.

Ellilä mentions that they are in talks with companies that have substantial volumes of sidestreams they wish to repurpose for potential partnerships. “We definitely haven’t given up on animal nutrition,” he says, indicating plans for joint ventures with other companies to share the capital investment.