Protix secures €45m from investors to scale up insect derived feed ingredients

By Jane Byrne contact

- Last updated on GMT

© istock/ermetico72
© istock/ermetico72
Netherlands-based insect protein and lipid producer, Protix, has raised €45m (US$50.2) in funding in an investment round involving Aqua-Spark, Rabobank, BOM and various private investors.  

Protix cofounder, Tarique Arsiwalla, told FeedNavigator this morning:

“We started the fund raising initiative only a few months ago. It was driven by the strong demand we were seeing from current customers but also by demand from emerging ones in new markets. We very quickly realized that at 1,600 tons per annum, capacity at our existing facility would not be able to produce the volumes required. 

Protix_storage
Protix storage facility © Protix

“The funding will partly be used to expand capacity step by step; we anticipate significant scale up in production – in multiples - to cater for the aquaculture, poultry and pet food segments.”

Demand driven expansion is helpful as the basis for securing financing arrangements, he said.

“If you look at the investors, there are no great surprises. We had been talking to sustainable aquaculture investors, Aqua- Spark, for a long while before they invested. We have known Rabobank for many years. They have been following our development trajectory since we were founded in 2009, and importantly, we have existing facilities with them.” 

Fish in, fish out ratio

The opening of the EU aquaculture feed market for insect derived protein from July was also a factor [in the capital generation]: “The fish in, fish out ratio is a hot topic both at industry and at the retail level. So in aquaculture, natural ingredients such as insect protein have significant value.”

Protix_processing
Protix facility © Protix

Protix products are used in over 12 countries to date - in feed applications ranging from pig and poultry to pet food specialties.  

“There is strong demand in the pet food sector for sustainably sourced, natural ingredients such as insect protein and lipids. It is a sizeable market, and growing,” ​he said.

Insect derived lipids 

The company is targeting a variety of niche markets, particularly in terms of its insect derived lipids that are said to support antibiotic reduced production in both poultry and fish. As insect oil is regarded as an animal fat, and not a protein, it is allowed to be used in feeds for all animals under EU regulation.

“Dutch producer, Coppens Animal Nutrition, is using our insect lipids to supplement piglet feed. An integrator in Poland will soon be using them in turkey feed. The lipids consist of 40% medium chain fatty acids (MCFAs), which are known to have antimicrobial properties, thus reducing the need for antibiotics.”

Live larvae in layers 

Layer production using live larvae is another string to its bow. Protix is supplying live larvae, the production parameters of which are certified to GMP+ safety standards, to a laying hen producer in the Netherlands. The eggs in question are sold in a regional Dutch supermarket chain, under the Protix own brand, OER Eieren, translating as ‘back to nature’. 

eggs protix
Protix own brand eggs sold in Dutch supermarket and produced with birds fed live grubs

“The farmer is supplementing 20% of dry feed with the live larvae, thus using local protein and eliminating the use of soy completing in the laying hen diet. Also the behavior of the chickens changes visibly; they are less bored and stop picking on each other.”

Protix, he said, is in talks with other Dutch and international retailers to get more of the live larvae fed eggs onto additional supermarket shelves.

Regulatory roadmap

The company is a founding member of industry consortium, the International Platform for Insects for Food and Feed (IPIFF), which is now lobbying for extension of use of insect meal in other feeds.

“Of course, the next step beyond aquaculture authorization in the EU, is to have insect protein approved for use in poultry feeds. We see huge opportunities there. Through IPIFF, we are actively talking to DG Santé and the European Food Safety Authority (EFSA) about this.”

The Dutch firm is, in tandem to its own expansion activities, involved in a joint venture​ with Switzerland’s Bühler. The two are developing "cost-effective, industrial scale" insect  rearing and processing facilities to get companies that want to get into insect meal production up to scale quickly. 

Mike Velings, co-founder of Aqua-Spark, explained his company’s participation in the investment round of €45m for Protix:

“We have been looking at insect protein production since the beginning of 2013, and it has taken us a long time to find the right partner. We wanted to be convinced about the scalability, about the viability of the industry, to be sure it was going to take off. We want to ensure we make good investments.

“We are excited now to get behind Protix. Its technology is incomparable; it is ahead of the pack.”

In addition, Protix’s tie-up with Bühler influenced Aqua-Spark’s decision to invest in the Dutch company. “Bühler, much like us, assessed all the main players before going with Protix, on the basis of its operational excellence, and as it has established relationships with companies around the globe, it provides that added potential to scale up the industry.”

He sees insect meal production becoming mainstream in ten years’ time. “Not in terms of it being a bulk commodity like soy – it is not going to get to that point in a decade - but mainstream in terms of it being widely accepted, and scaled up.”

Once it gets that kind of momentum behind it, insect meal production will continue to ramp up, to become a commodity priced feed ingredient within 20 or 30 years, he added.

He was also very positive about the LCA credentials of the insect production business and its capacity to upcycle low value waste, and use minimal land. “You take one kilo of waste and you put that into an insect production system, and out of that you get zero waste and multiple end products, from water, to fertilizer, to meal and lipids – high end products with their own unique characteristics. It is not only about the percentage of protein that is produced.”​ 

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