With more than 180 clients across more than 20 markets and surging demand across the globe, the significant funding will enable the biotech firm to increase production capacity, expand vertical integration, scale operations and deliver more of its premium, traceable and clinically validated extracts produced utilizing its patented NordRelease extraction method.
“We started this business to prove to the world that functional mushroom medicine can be trusted, is effective and of good science,” Eric Puro, CEO and co-founder of KÄÄPÄ Biotech, told NutraIngredients.
“In order to further meet this mission, we will be investing additional effort into our clinical research as well as expanding our production facilities to meet our customers’ demands. Things are only just starting.”
The functional mushroom market continues to expand rapidly, with the sector fuelled by increasing customer demand for high-quality, trustworthy, and science-backed functional mushroom products, Puro said.
He noted multiple factors driving the growth behind the functional mushroom trend.
“You are seeing the younger generation taking nutraceuticals at a much faster pace than ever before,” he noted. “Their curiosity and needs are perfectly aligned with the functional mushroom benefits.
“We are also seeing all time high interest in cognition, healthy aging and stress/sleep management, all of which have mushrooms which line up perfectly to support those customer needs with unique and effective methods of action.”
He said the United States and Europe are still the largest markets, but his team is “looking forward to opening up other global markets in the coming years as the trend and knowledge expands”.
Shrooming business
To keep up with growing demand, the company is expanding rapidly. Currently the team consists some 30 members—a number set to grow by another 20 in the next 18 months.
As recently as September 2024, KÄÄPÄ Biotech unveiled its state-of-the-art mushroom cultivation facility in Paimio, Finland, a pivotal advancement that markedly expanded both production capacity and R&D capabilities.
In June 2025, the company opened another cultivation facility in Salo, Finland, further strengthening its capacity to meet the rapidly growing global demand for Nordic origin, premium functional mushroom ingredients.
EFSA granted approval of the firm’s trademarked NordRelease extraction process, developed using Ultrasonic Assisted Extraction (UAE), earlier this year. The process employs high-frequency sound waves to break down cellular structures and release of bioactive compounds.
The latest funding round was led by global agri-food tech fund manager PeakBridge, together with Zintinus, a food tech sector venture capital fund.
“KÄÄPÄ Biotech exemplifies what we look for in this space: vertical integration that addresses real supply chain vulnerabilities, rigorous bioactive standardization and a European base that cuts dependence on Asia’s concentrated production,” said Dr. Gali Artzi, partner & CTO at PeakBridge.
“Functional mushrooms represent more than a wellness trend; they’re a convergence of centuries of traditional use, growing clinical evidence and modern extraction science that delivers measurable health benefits. KÄÄPÄ is a true sector leader and we’re thrilled to expand our support into this next chapter.”
Christian Neuss, partner at Zintinus, said KÄÄPÄ’s “commitment to transparent production and vertical integration” aligns closely with Zintinus’ mission to support transformative food technologies.
“This strategic partnership enables us to accelerate their next phase of growth and create long-term value for consumers, the environment, and investors,” he said.
Sustainable growth
The company is composed of four divisions: KÄÄPÄ Biotech is the research element of the business, with a team looking for opportunities to commercialize the tech to industry problems; KÄÄPÄ Mushrooms is the D2C product line; Nordic Mushrooms is the ingredient supplier arm; and KÄÄPÄ Forest is the sustainable Chaga growing programme.
The 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).
The company is the largest cultivator of chaga in the world, and produces the mushroom through a sustainable process which aims to stem some of the potential damage that could be done through other foraging techniques currently used around the globe.
“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,” Puro previously told NI. “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 the company and then the business buys the mushrooms back from them, exclusively.
“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,” Puro said.
