The Finnish biotechnology company’s trademarked extraction process was developed using Ultrasonic Assisted Extraction (UAE), which employs high-frequency sound waves to break down cellular structures and release of bioactive compounds.
“It‘s a major step by EFSA to have come out and approved our extraction process,” Eric Puro, CEO of KÄÄPÄ Biotech, told NutraIngredients.
“We feel this landmark EFSA decision has opened the path for high quality and effective EU-produced functional mushroom extracts for both our existing customers who are growing and new partners.”
Obtaining approval
Puro noted that EFSA’s regulatory standards are “very strict for good reason,” explaining that the new technology which was developed specifically to ensure greater stability and a more thorough extraction process, had to demonstrate the safety of the final product.
As part of the application, KÄÄPÄ Biotech submitted a dossier to its local food authority with data demonstrating that ingredients manufactured using the NordRelease extraction process did not qualify as novel food.
According to EU law, novel food refers to food that was not consumed to a significant degree by humans in the EU before May 15, 1997, including food produced using new production processes that may significantly alter the food’s composition or structure.
The key challenge, Puro explained, was obtaining sign-off from all member states, which takes “significant time and resources.”
This involved conducting lab tests with independent labs on each NordRelease mushroom extract available throughout the European market, a comprehensive scientific literary review, extensive discussions with the EFSA team about Standard Operating Procedures (SOPs) and thorough chemical analysis of bioactive levels in the final products. Once completed, the dossier is submitted to all EU members states for review and comment.
The growing market
KÄÄPÄ Biotech is currently active in the United States, South Korea, UK and EU, and its expansion strategy is to keep focusing on these markets while using the regulation update to “support more brands with their regulatory compliance needs.”
“As the functional mushroom market is booming, we feel the need to ensure regulatory compliance is met and stable,” Puro said.
“This allows many larger companies and brands to feel safer and more comfortable to use effective functional mushroom extracts in their products. At the end of the day, this is a win for both brands and consumers as functional mushrooms can support our food supplement needs.”
He forecasts that functional mushrooms will become more mainstream in European consumer goods in the coming years, with major retailers already launching mushroom-based products.
“Seeing the likes of Marks & Spencer introduce mushroom drinks is great for everyone in this space,” he said.
“Of course, we’re delighted to see this happen, but it will bring a spotlight onto things like quality metrics and recommended effective bioactive doses, which is only a good thing. We need this area really looked at and taken seriously as this shroom boom continues.”
Growing operations
In September 2024, KÄÄPÄ Biotech opened a new cultivation facility in Paimio, Finland to support its growing operations, and in April 2025, the company received a €900,000 investment from global venture capitalist PeakBridge.
Puro noted that the investment from PeakBridge, a “major player in the food and ingredients markets”, will enable KÄÄPÄ Biotech to “scale both in-house raw material supply and overall production capacity to meet customer demands.”
“We have many customers going through growth, we have huge inbound interest, and now we have a new partner in PeakBridge that wants to accelerate our growth to support just that,” he said.
“On top of that, we’re currently raising an equity round, which we should close in the next three months to further accelerate our growth and support the overall growth of the functional mushroom industry.”
He added that it is more important than ever to scale up production due to “major supply issues with low-quality mushroom ingredients coming into the EU market from China.”
KÄÄPÄ Biotech saw an “overwhelming response” from many global companies looking for high-quality, EU-grown and extracted functional mushroom ingredients following the publication of recent market analysis that called for more rigorous quality control in mushroom supplements.
“We see this interest by top EU brands as our main motivator to build and develop our own large-scale functional mushroom growing center,” Puro said.