Led by Astanor Ventures, and backed by established international funds including Bpifrance, Talis Capital, Idinvest Partners, Finasucre and Compagnie du Bois Sauvage, Ÿnsect said the $125m (€110m) investment is the largest-ever ag-tech funding deal outside of the US.
This latest Series C investment round, signed off in January but only announced today, brings to $175m the amount of capital that the French firm has raised to date.
The funding will allow Ÿnsect to scale up production by building what it said will be the world’s biggest insect farm, to be located in Amiens Metropole, in Northern France. It will also enable it to step up its international expansion program by opening a new factory in North America.
Ÿnsect’s flagship product is ŸnMeal, a powder derived from farmed mealworm larvae.
We spoke to Antoine Hubert, CEO of Ÿnsect, to hear more about the developments ahead.
First off, he said the investment was very positive for the alternative protein market in general. He noted also how it further demonstrates the investment community’s confidence in the French ag-tech sector:
“France is one of the world leaders in agriculture so, really, it is not unusual that such innovation is underway in France, compared to other countries. Investors are coming to France, and they are particularly attracted to the insect product production segment.”
Indeed, late last year, InnovaFeed, another French insect protein player, announced it had raised €40m in funding from international investors, bringing the total amount of funds it had generated in 2018 to over €55m.
Ÿnsect has already booked $70m in accumulated orders spanning the fish feed, pet food and fertilizer sectors, for the next four years, with more in the pipeline. “This commercial structure was a key point in securing the funding, a proof of our viability for investors.”
In terms of establishing its first commercial scale production facilities both in France and North America, the Ÿnsect CEO said the factory planned for Amiens is seen as a very big project in that region, with the company currently engaging with the local authorities and signing off on all the paperwork required:
“It will be a few more months before we can start to build, likely at the end of the year.”
The construction will take at least 12 months; Hubert expects the French plant to go live in early 2021.
Production is based on the vertical indoor farming model.
The North American factory build, ideally, would follow the construction of the unit in Amiens, leveraging the engineering and design expertise accrued through the building of the French plant.
The actual location for the North American manufacturing base is not yet decided though: “It could be in either Canada or the mid-west part of the US, we are weighing up all the opportunities.”
The idea is to be located in the core of a logistics hub, close to industrial parks with a plethora of suppliers of by-products from crop based food and beverage production.
“We have been working with the big real estate company, Jones Lang LaSalle (JLL), on the French plant, it helped us to secure the best land. It will do the same in terms of North America. Once we have identified the site, we will secure the feedstock [supply].”
Where many insect producers have chosen to base their production on the Black Solder Fly (BSF), Ÿnsect’s production is based on the Tenebrio Molitor; small common beetles known as mealworms.
Hubert said their feedstock can be made up of a lot of different ingredients, which allows the company flexibility in sourcing.
“We now have great understanding of the macro and micro-nutritional requirements of our mealworm.”
In terms of substrate selection, he said it will come down to the best price the company can get for the feedstock and the distance of the supplier from the plant.
The mealworm that Ÿnsect uses is a gregarious and nocturnal species, which make its farming easier, said the company. It brings benefits in terms of the process, the scalability, said the CEO.
“We tested a range of insect species back in 2013 - the flies, the locusts and the crickets - and we found out the beetles [the mealworm], even though they grow more slowly than flies, are more adapted to very large scale production, in terms of enabling automation throughout the life cycle. Harvesting, etc., is much easier with non-flying insects."
Enabled by deep tech, the entire ŸnMeal production process will be automated, from feeding to controlling the health and welfare of the insects, to quality control and to harvesting the mature insects, said the company.
“Heat emission is key in the business and the Molitor also has a much better performance in comparison to other insects in relation to this.”
In terms of FCR, the mealworm converts very efficiently as well, he said.
Ÿnsect is positioning its ingredients as premium. It will target the fish feed, pet food and fertilizers sectors in the short-term.
The CEO said the company has published many different studies that it has done with independent labs - in Norway for salmon, in Thailand for shrimp, and more recently in Greece, for sea bass - and that those trials showed its product scored better than fishmeal in terms of both growth and mortality reduction.
Ÿnsect, he said, needs to undertake further research to fully explain the mode of action and the productivity and health benefits its mealworm derived products bring. However, he said the results, so far, would indicate that it could be down to the size of the proteins, or the specificities of the peptides in the product, while the company’s production process may also play a role.
The company said it has 25 patents covering its technology, the products themselves and their different applications.
In terms of targeting other animal nutrition segments, beyond fish, Hubert said pig farming, particularly the piglet stage, is more appealing for Ÿnsect than poultry production as industry would seem to be prepared to pay higher prices for ingredients for that life stage. Such market entry awaits legislative developments, though there would seem to be a move on in that direction in Europe.