On January 20, 2026, global investment titan KKR & Co LP, which manages $723 billion in assets, announced the completion of a follow-on investment in fungal biotechnology firm Sylvan through its US dollar fund and its inaugural RMB fund.
Other institutions participating in this funding round included TPG NewQuest, Ping An Capital, and China Post Insurance, forming a notably high-profile investment consortium. This marks the second major investment by KKR since its initial 2018 investment in Jiangsu Yugang, the Chinese company behind Sylvan.
The background of this transaction traces back to 2018, when KKR invested approximately 2 billion RMB in Jiangsu Yugang Modern Agricultural Technology Co., Ltd., a company founded by Huang Jianguang, known as China's "Mushroom King."
Following KKR's investment, Jiangsu Yugang's Guannan base rapidly evolved into the world's largest single-site producer of Agaricus bisporus (white button mushrooms), achieving potential annual revenues of around 500 million RMB. That same year, with KKR's assistance, Jiangsu Yugang completed a full acquisition of the US-based Sylvan, a company originally established in 1932.
Founded in 1932, Sylvan is a globally leading enterprise in mushroom spawn and fungal biotechnology, focusing on unlocking the potential of fungal biological systems to provide sustainable solutions for the food, health, agriculture, and materials sectors. Currently, Sylvan operates multiple production bases worldwide, serving clients across 65 countries.
In April 2025, Sylvan had received an investment from Novo Holdings, which also increased its stake in this latest funding round. Following this additional investment, KKR maintains its position as the controlling shareholder of Sylvan.
This follow-on investment in Sylvan, led by KKR, attracted participation from several globally renowned investment institutions, creating a diversified investor lineup.
This investor composition not only reflects international capital's optimism towards China's biotechnology market but also demonstrates the coordinated deployment of US dollar and Renminbi capital in this sector.
Particularly noteworthy is that this marks the first public appearance of KKR's inaugural RMB fund, signaling a significant advancement in the international investment giant's localization strategy within China.
KKR's follow-on investment in Sylvan represents a crucial move in its strategic positioning within the Chinese market. As of September 30, 2025, KKR's assets under management had reached $723 billion, with business spanning private equity, private credit, real estate, and other areas.
In recent years, KKR has noticeably accelerated its investment pace in China. In August 2025, KKR's onshore private investment entity completed fund registration with the Asset Management Association of China, marking the official launch of its first onshore RMB fund based in Shanghai.
Around the same time, KKR indirectly acquired an 85% stake in Vision International Limited through a newly established special purpose vehicle, bringing the popular domestic soft drink brand "Dayao Soda" under its wing; it also participated in the pursuit of acquiring Starbucks China, entering the list of potential buyers.
On January 14, 2026, KKR announced the final close of a $2.5 billion Asia Pacific private credit fund, which will focus on investing in high-quality credit assets in non-public markets across the Asia-Pacific region.
Since 2019, KKR has completed over 60 investment projects in the Asia-Pacific region through its Asia credit strategy, with approximately $8.3 billion invested by KKR and total transaction values reaching $27.5 billion.
Joe Bae, Partner and Head of KKR's Asia Pacific Private Equity business, stated: "We have worked closely with management to expand Sylvan's footprint in global fungal biotechnology and broader areas." Bae added, "KKR is delighted to welcome new investors from overseas and China to join us in supporting Sylvan as it expands its platform and global influence."
The fungal biotechnology sector represented by Sylvan is emerging as a key area for global sustainable development. China is a major producer of cultivated mushrooms, accounting for 75% of the world's edible fungi output, with white mushrooms comprising about 40% of the total edible fungi, making them one of the most important categories.
However, the applications of modern fungal biotechnology extend far beyond the dining table. Sylvan is developing various high-value-added products, including mycelium-based materials, biopesticides, and nutritional supplements. Fungus-based materials can replace traditional materials like plastics, biopesticides can reduce chemical pesticide use, and nutritional supplements meet health market demands—these areas collectively outline the vast potential of the fungal economy.
Qi Yanquan, CEO of Sylvan, stated: "This investment round will help us accelerate the achievement of our strategic goal to become a global leader in fungal biotechnology solutions across multiple sectors and regions." Qi expressed strong confidence in Sylvan's next phase of growth: "Leveraging the support and expertise of our investors, we are highly confident about Sylvan's growth in the next stage."
The proceeds from this investment round will primarily be used to enhance production capacity, strengthen R&D capabilities, expand high-growth product lines, and deepen the company's presence in the rapidly industrializing mushroom and bio-product markets across Asia.
The event of KKR's follow-on investment in Sylvan may signal several important trends: international capital's growing interest in China's agricultural technology and biotechnology sectors, particularly for projects with sustainability and innovation credentials.
Concurrently, RMB funds are becoming a crucial tool for international investment institutions to position themselves in the Chinese market, a trend likely to attract more global firms to establish their own RMB funds.
From an industrial chain perspective, the integration of traditional agriculture with high-tech biotechnology is accelerating, blurring the boundaries between food, health, agriculture, and materials, thereby fostering new industrial opportunities.
As global emphasis on sustainable development and the circular economy intensifies, fungal biotechnology, as a field capable of providing sustainable solutions, is likely to attract increased capital and resource allocation.
As the world's largest producer of edible fungi, China possesses inherent industrial foundations and R&D advantages in the fungal biotechnology sector, positioning it to potentially assume a leading role in this emerging field.
HSBC analyst Vikram Gandhi, evaluating KKR, set a target price of $119, suggesting that the current market's consensus price-to-earnings ratio for 2026 does not warrant a premium for KKR. Despite this assessment, KKR continues its active deployment strategy.
Simultaneously with the announcement of the Sylvan investment, KKR was selected by Thames Water to lead its capital restructuring efforts, expanded its operations in the Middle East by appointing General David Petraeus as Chairman of KKR Middle East, demonstrating its global activity.
As Sylvan accelerates its expansion with KKR's backing, those seemingly humble mushroom spores are quietly growing into critical bridges connecting traditional agriculture with the future bio-economy, weaving an invisible yet ubiquitous fungal network across the soils of 65 countries worldwide.
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