Finnish protein innovator eniferBio raises €11m from investors

By Jane Byrne

- Last updated on GMT

© GettyImages/Yagi Studio
© GettyImages/Yagi Studio

Related tags Finland Protein aqua feed pet food Skretting

Finland based startup, eniferBio, has generated €11m (US$12.05m) in a series A funding round, led by Dutch aquaculture investment fund, Aqua-Spark, with Tesi, Valio, Voima Ventures and Nordic Foodtech VC also participating.

Using those funds, the biotech will begin to scale up the production of its Pekilo mycoprotein powder to thousands of tons per year. Pekilo is a fungus that, through a special fermentation process, can produce a dried powder rich in protein and has a vast variety of usage cases, such as pet food, aqua feed, and human food. The company is now seeking novel food approval from the EU and other markets.

The Pekilo production process was originally developed by forestry industry scientists in the 1960s in Finland to produce cost-efficient animal feed protein from side streams of the pulp and paper industry.

Using the same, yet enhanced, proprietary technology and fermentation process, eniferBio says it can upcycle by-products from diverse agri-, food- and forest industry processes into its mycoprotein, which consists of up to 70% protein, 20–30% of fiber, about 10% of fats and minerals, and a high concentration of vitamin B. The company maintains the production process is efficient, uses little water, does not require a large land area, and does not cause eutrophication like traditional agriculture.

Collaboration

It was almost three years ago that the company was spun out from VTT Technical Research Centre of Finland, and it is already collaborating with companies in the feed and food industries, such as Skretting, the global aquafeed division of Nutreco, Purina for pet food, and Valio for consumer food products.

When asked how eniferBio has been able to set up alliances with major industry players in that timeframe, CEO and cofounder of the Finnish innovator, Simo Ellilä, told FeedNavigator: “We're lucky as there is so much credibility attached to the old [Pekilo production] process. It had years of validation behind it, with a protein product that was actually used in animal feed. That gives us a lot of traction.”

Getting the economics right

Multinational feed and food companies have now been working with diverse types of alt protein startups over the past five years or so, he said, allowing them enough time to become keenly aware of the challenges linked to the industrialization of these novel protein sources. And there have been some notable disappointments in this space, in the sense that some of the processes do not scale, claimed Ellilä.

“Moreover, a lot of other alt protein companies have realized that the margins in feed are so low that they just cannot get the economics right. It is of course a challenge, but we believe that we can get there.”

One of the big differences in terms of eniferBio’s production model compared to that of some competitors is the raw material stream it can leverage, with it able to tap into ‘nearly for free’ byproducts coming from industry, said the cofounder.

“It is also about how we integrate with existing facilities. We will tap into existing infrastructure for steam and electricity to [ensure our process can feasibly supply a sector] like aqua feed.”

Facility build, JVs and licensing deals

The team is approaching production scale-up from a couple of different angles, with it planning to build a mid-scale plant in Finland. Initially, that site will be a kind of demo facility but eventually it will be geared more towards the production of food grade protein, enabling it to be commercially viable.

“However, in terms of aqua feed production, we are looking at partnering with third parties – operators active in the bioethanol space - through joint ventures or licensing deals. We are quite far along in terms of negotiations in that respect.” 

The Pekilo protein production model is designed to leverage cheap, fermentable side-streams. The biotech previously evaluated​ about 40 different, globally sourced, raw materials, overall, within its smaller R&D fermenters. The distillation residues from bioethanol production, whether that is sugarcane, sugar beet or starch based, proved the most effective.

Bioethanol sites produce large volumes of stillage, a liquid waste remaining after ethanol distillation. “They are looking at how they can valorize that side-stream, how they can get more value out of it, and, essentially, our process enables that.”

As regards the JV structures, the startup would initially have “some skin in the game”, sharing in the costs of the building of a factory at the refinery site and providing the technology. “Once the process is more established, then we would pursue licensing arrangements only.”

The latest investment round puts the company in “a really good place,” with the financing going towards the facility build and enabling the execution of that JV strategy, Ellilä confirmed.

Food grade protein

The funds raised also allowed the Finnish company to compile its novel foods dossier. “We need to file that regulatory package with the relevant authorities in Europe.”

To produce food grade protein, eniferBio would not use stillage, only higher-grade byproduct streams. The startup is working with Valio to repurpose its whey permeates and it is also collaborating with other food companies to see how it can valorize their sugar-based side-streams.

Pet food is another target market. “In pet food, the offtake volumes are often more difficult to define. Aqua feed, pet, and human food: these are all different businesses. In pet and human food, it is higher margins but smaller volumes. Our approach is to consider them all from the raw material side.”

If, for example, eniferBio judges that a particular bioethanol site has limited side-stream volumes to make it a viable partner for aqua feed production, it can look to exploit those volumes for pet food supply instead, he explained.

“Ultimately, we see ourselves as a biorefinery company with a process that upcycles or adds value to industrial side-streams.”

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