The Canadian insect company announced last week that it had completed a new round of financing with banking venture firm Dane Creek Capital Corp. The investing company has increased its stock in Midgard from 65% to 80%.
However, additional financial terms of the arrangement are not being released at this time.
The investment in the insect farm is aimed at supporting additional research and development efforts, said Mark Warren, chairman and CEO of Dane Creek Capital Corp. The financial company has provided financial and management support to new companies in the companion animal sector for more than 30 years.
“This is a long runway investment,” he told FeedNavigator. “This is not like some of the investments in the companion animal space [the company has made] – we understand that this is a long runway investment.”
In 2016, Dane Creek initially acquired a 48% interest in the insect farm started by Joy Hillier, the company reported. However, the farm is now examining its alternative protein sources for livestock.
“Initially it was about the opportunity with respect to the companion animal industry,” Warren said. “Over time, as we’ve learned more, and worked with Joy, we’ve become convinced there are opportunities outside of the companion animal market so we’re more than happy to continue putting in money with the view that the commercial opportunities [exist].”
Midgard Insect Farm operates two facilities in Windsor, Nova Scotia, Dane Creek reported. The insect farm was founded in 2016 and has since launched a series of cricket-protein based pet treats and wholesale cricket meal for the companion animal industry.
The farm, however, should not be confused with Ohio-based Midgard Farms, which is an unaffiliated apiary.
However, the farm is now looking at moving into the agricultural and animal feed sector, said Warren.
“We just think that as we explore opportunities some of the bigger opportunities are in the agriculture space,” he said. “A lot of experiments going on [examine] incorporating cricket meal into poultry feed.”
Feed Protein Vision in Amsterdam in March will assess the benefits of insect meal for use as a protein alternative in animal feed.
Some of the feeding trials and research suggest that the insect-based ingredients may improve gut health, he said. “There is evidence to suggest that you can improve the gut lining of animals that have perhaps over years of breeding have had some gut compromises,” he added.
In addition to the insect company’s initial work with crickets, there also is interest in examining the use of mealworms in products, he said. However, any interest in exploring work with Black Soldier Flies would be further “down the road,” he added.
As the insect company produces products for the agricultural sector, the initial focus will be on gaining regulatory approvals for use in Canada, said Warren.
“Anything we do will be done first in Canada,” he said. “We’re still some ways away.”
The current focus looks at developing feed products for the poultry and aquaculture industries, he said.
“We intend to commit more capital,” he said of the venture. “And we see some announcements in the next two to three months.”