Editor's Spotlight: Startup Focus

Sustainable biotech startup becomes Europe's biggest medicinal mushroom supplier

By Nikki Hancocks

- Last updated on GMT

Kaapa Biotech team
Kaapa Biotech team

Related tags mushrooms biotech startup

A two-year-young biotech company, now Europe's largest medicinal mushroom producer, has launched a new line of Nordic Mushroom liquid and powder extracts for the supplements industry.

The transparent and environmentally-conscious Finnish startup company KÄÄPÄ Biotech has quickly grown into the largest medicinal mushroom producer outside of Asia thanks to its high quality ingredients and innovative sustainable solution to mushroom foraging.

US-born CEO and co-founder of KÄÄPÄ, Eric Puro, followed a very 'traditional' career path, with an education in economics and business, working for a large corporate consultancy in Chicago for much of his twenties before he started looking to 'feed his soul' with a career focused on good.

"I wanted to do good and use my brain for a better purpose. I did everything from squatting in London, helping stop a forest from being cut down, building ecological houses, I started an international non-profit company called 'The Push' which helps people find places to create natural buildings. I was involved in all sorts of environmental activitism and I really enjoyed finding connection with nature.

"I had always been interested in fungi since attending a workshop on how to cultivate medicinal mushrooms. I had read so many books on the subject and learnt how you can use different mushrooms to solve different health problems. I learnt that mushrooms' immune systems are basically the same as humans' and humans have receptors for the chemicals that mushrooms make - you can think of mushrooms as little pharmaceutical factories.

"I learnt about biohacking, and that if we can understand the mushroom's chemistry and our own biology, we can use the beta-glucans 

and other compounds in mushrooms, to stimulate different effects in our own bodies."

In Kentucky, Puro and his late wife were fortunate enough to live on 62 acres of land, with a permaculture farm, three waterfalls, and a loghouse. But when they had their daughter, Puro began to wonder how to actually make some money from his interests in permaculture and health.

On a family vacation to Finland to visit his late wife's family, they decided the healthy clean-air country life was for them, so they settled there and it turned out that many people in that community shared his passion.

"In Helsinki there are these places called myco hack labs, connected to universities and other companies, where people interested in fungi connect with others to carry out projects or just share knowledge. I made a lot of friends through this community of people."

Puro continued his consultancy work while cultivating his own mushroom farm, with 1,000 meters of logs, on the family's land.

"I invited a friend over for a lunch and sauna - as is the norm in Finland - and he bought a friend Lorin von Longo-Leibenstein, a microbiologist, who didn't stop talking about fungi. 

"He wanted to set up a business and I started to do business consulting for his company called 'Mushroom Agent' which basically was a research consultancy and mushroom supplier for companies and institutions.

"I ended up showing him where I had been growing mushrooms and he said 'you've really got something here'."

The two early on added two more co-founders Henri Lokki and Otso Mursula to help build a team of experts in farming, marketing, outsourcing, and biohacking, and soon they had created a medicinal mushroom production company which now has a core team of 20 people and around 20,000 metre long logs growing different medicinal mushrooms.

After two years, the company has evolved into four divisions: Kaapa Biotech is the research element of the business, with a team looking for opportunities to commercialise the tech to industry problems; Kaapa Health is the consumer division through which the company is selling its own brand of nutraceuticals; Nordic Mushrooms, which is the ingredient supplier route under which they are supplying several companies in the US and UK; and Kaapa Forest, which is the sustainable Chaga growing programme.

The newly launched wholesale mushroom extract product line includes: Finnish grown organic chaga (Inonotus obliquus), reishi (Ganoderma lucidum), shiitake (Lentinula edodes), cordyceps (Cordyceps militaris), lion’s mane (Hericium erinaceus), maitake (Grifola frondosa) and turkey tail (Trametes versicolor).  

Kaapa Forest Division

The company is now the largest cultivator of Chaga in the world, and it produces the mushroom through a sustainable process which aims to stem some of the potential damage

GettyImages chaga
Chaga mushrooms / Getty Images

that could be done through other foraging techniques currently used around the globe.

"It's a foraged mushroom and how that foraging is done depends on the laws of the countries. Russia is the largest producer and there might be a lot of damage being done there.

"In Finland, much of the forest maintenance is around clear cutting birch trees. Birches are the first tree to grow in cleared land and they grow too densely and this actually harms the natural colonisation of the forest. Usually, the wood cut down during clear cutting would be manufactured for the paper industry.

"This is where the Chaga mushroom offers a natural way to cut tree numbers. Chaga is actually a canker that appears on birch trees and eventually it causes the tree to die.

"We are working with forest owners in Finland - we now work in over 250 hectares of forest - inoculating live birch trees that need to be cut down. Once the Chaga has grown and the tree needs to be cut down, we harvest the Chaga, and then if the forest owner chooses this option then we can inoculate tree logs with rare and endangered fungal species which we lay down on the ground to add essential nutrition to top soil.

"The forest owners buy the materials from us and then we buy the mushrooms back from them, exclusively. This is an entirely new business model for forest owners.

"Not only is this doing good in terms of creating a sustainable supply chain, but it has also bootstrapped our business as we have been able to make a profit from this right from the off." 

The health benefits

Beta-glucans are in almost every mushrooms and these offer immune support benefits. These bypass the normal digestive system and they can immune stimulate so they affect natural killer cells in the body.

"If a virus gets into our body, it can take about three days for the killer cells to become activated, or they might self reflect and mark themselves and abnormal, and then they might be flushed out,” explains Puro.

"We can take beta-glucans and activate the killer cell response straight away. So if we know we are exposing ourselves to virus risks we can boost our intake and force the immune system to be on high alert.

"Turkey tale has a lot of beta-glucans and studies have been shown to help with the immune system. If you're in Japan and you get cancer you are given Turkey Tale - it's the medicine you get.

"People take Chaga mushrooms for their extremely high anti-oxidant content. They are referred to as the mushroom of immortality in some cultures."

Apart from the Chaga, all the company's mushrooms are grown indoors. The benefit of growing mushrooms indoors is the company has the ability to control how the mushrooms grow and, therefore, the compounds within the mushrooms.

"When you create the right environment to stress a mushroom out, they need to develop their immune system in order to deal with that so they start to create more of the chemicals that are attractive for human consumption. This allows us to create a really potent product."

The technology

When compounds are water soluble, the human body is usually able to break them down when eating - as is the case with plant compounds. 

But mushroom cell walls are made of chitin and without an extraction process, the compounds of interest are locked within the mushroom cell wall and pass through the human digestive system without being absorbed. This means that the body can't attain all the potential health benefiting chemicals in a mushroom simply by eating it. 

KÄÄPÄ Biotech has invested in Ultrasonic Assisted Extraction technology which utilises a combination of hot water and alcohol extraction to ensure the bio-availability of the desired bioactive compounds in each mushroom.

The market

Speaking about the opportunity in the European nutraceuticals space, Puro says his medicinal mushrooms seem to be ticking all the key boxes right now - natural, sustainable, nootropic, and transparent.

"The market is really demanding a lot of medicinal mushrooms - especially in the US where it is a 10 billion USD annual industry - and as the largest producer outside of Asia, our ingredients are very appealing to brands looking for transparent and sustainably sourced ingredients."

Puro explains that while the market is mostly concentrated in Asia and the US, he is receiving a lot of interest from startups in the UK so he expects the trend will kick off in Europe soon.

"Every startup that has contacted us in Europe, has been in the UK. So that is the country where interest is really brewing now.

"I think once the UK has left the EU in January we will start to see a lot of innovation in this space. It seems that EFSA regulations really hinder innovation with these ingredients in other countries in Europe. I think that the UK is likely to take a regulatory stance somewhere between the very strict rules in Europe and the very laid back attitude in the US.

"I can especially see this trend evolving in the Sports Nutrition space, most notably with cordyceps which are said to increase the body's production of the molecule adenosine triphosphate (ATP), which is essential for energy.

"Most big athletes are tapping into this ingredient right now and I can imagine this trend trickling down into the mass market soon."

The entrepreneur adds that he predicts the market will soon see some interesting innovations with mushrooms and CBD.

"The synergy of the two ingredients is like two plus two equals 18!

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