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Ÿnsect raises $175 million to harness the full potential of mealworms

lots of brown mealworms on top of each other
Image Credit: Robert Gunnarsson // Unsplash

In many places around the world, insects are an ordinary and nutritional form of food. In Thailand, crickets are deep-fried and served on the street, soy sauce-slathered silkworms are snacked on, and fried bamboo worms are salted to taste and served just like crinkle-cut French fries.

Over in Mexico, ant wings, or chicatanas, are mixed into salsa and mole, dried grasshoppers are doused in mild chili powder and a squeeze of lime juice, and “Aztec caviar,” or ahuatle, are water-fly eggs that have over 500 years of history.

Prior to Spanish colonialism, this “caviar” sustained Aztec warriors, as the shrimp paste-like larvae weighs in at 93% protein. And those dried grasshoppers? They have nearly as much protein as a slab of salmon, with Thai crickets having just as much omega-3.

The only difference is insects don’t have the same climate change-induced issues pressuring the salmon population, or the overfishing problem that has led to negative environmental impacts.

That’s the ancient secret Ÿnsect — a FootPrint Coalition portfolio company — cracked in 2011, which led them to found the company.

Initially, they focused on making more sustainable food for fish, because in addition to overfishing and global warming, many industrial fish farms feed fish to other fish, ballooning our decreasing fish stock problem.

“The global demand for fish has risen at almost twice the rate of the global population,” Robert Downey Jr. explained in a video on the subject.

So, Ÿnsect moved to tackle that problem, opening up farms in France, the Netherlands, the United States, and soon Mexico. Now, the company is adding to that mission. With a €160 million, or $175 million, financing round, the French startup is venturing into higher-value food for both pets and humans.

The environmental pawprint of pet food may not be as large as humans’ environmental footprints, but kibble definitively plays a part in agricultural emissions. According to a study in Nature, the dry foods in pet food alone account for 2.9% of CO2-equivalent emissions and up to 1.2% of agricultural land use.

If pet food was a country, that would place its emissions in the top ten highest-emitting countries, besting both Australia and Brazil.

As reported by Bloomberg, Ÿnsect plans to prioritize pet and human food to boost profit amid soaring energy, raw materials, and debt costs. With this plan, the company hopes to have the same level of environmental impact, while increasing its profitability.

“We are really focused today on where the value, the revenue are the highest,” and where the climate and biodiversity footprints are best, Ÿnsect co-founder Antoine Hubert said in an interview with the publication. “Animal feed is a good market, but it takes more time to make a positive financial and economic impact.”

As the demand for alternative proteins continues to rise, investment data shows the long-term outlook for the market is strong with a high growth potential. Plus, as the Rockefeller Foundation and BCG estimate, the alternative protein market has an annual unmet funding need of $40 billion.

Ÿnsect’s most recent financing round puts a small dent in that need, bringing its total to about $625 million raised, making it the best-funded insect startup in all of Europe. It’s followed closely by fellow French business Innovafeed, which has raised $485 million.

Similar to Ÿnsect, Innovafeed uses insects for plant and animal nutrition, but with its new direction, Ÿnsect is using the money from its funding round to expand its flagship vertical insect farm in Amiens, northern France, and develop its new projects, Hubert told Reuters in an interview. The startup is also in talks about additional funding.

While the company did not disclose all of the investors, FootPrint Coalition, along with Astanor, BPI France, Crédit Agricole, and Upfront were all among past financiers.

“It’s positive to see in this tough environment, to find support and people who believe in what you are doing,” Hubert said.

According to Ÿnsect the Amiens farm, Ynfarm, is the largest vertical insect farm in the world and is expected to deliver as much as 160,000 tons of insects a year. While Ÿnsect plans to close its farm in the Netherlands, laying off about 20% of its 360 people global workforce, the farm be gradually converted into a research center.

Despite the cuts, according to Financial Times’ Sifted, Ÿnsect’s revised strategy includes hiring throughout next year — roughly 35 to 40 roles, mainly engineering roles outside of Europe.

In 2021, the company formally entered the human food market, and in January of that year, the European Food Safety Authority (EFSA) deemed mealworms safe for human consumption. It is among six insect-based food products that have been approved by the EFSA, with two greenlit just as of March.

The company says “It may be unrealistic to imagine that Europeans will transform their eating habits overnight,” but “it would seem that there is no obstacle to such a transformation,” given both the environmental benefits and the attention insect food received at COP27.

In its blog post discussing possible Western adaptations of mealworms, such as protein-packed flour or insect oils as alternative fats, the company points to the United Nation’s backed notion that insect consumption could play a valuable role in addressing the global shortage of food, “as the world population lurches towards an estimated 9 billion in 2050.”

The Western world may not be quick to join Mexico in its spicy grasshopper street food, Zimbabwe with its cicada relish, or Brazil with its sauteed ants, but Ÿnsect shows that there’s a possibility to reduce the environmental impact of traditional Western proteins in both the pet and people-food space.

“It is time to decide that the future is now,” Ÿnsect wrote in a blog post.

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