Mealworm farmer moves focus away from feed

French mealworm farmer Ÿnsect is to change its focus from producing insects for animal feed - a low-margin product - and instead concentrate on insects for human consumption, pet food and plant food, reports European start-up news website Sifted.eu.

Ÿnsect has raised €160 million in equity financing but is also cutting its headcount by 70, roughly 20% of the company, said Sifted.

The €160m is equity financing. Ÿnsect is not disclosing where the new funding comes from, but the company’s founder, Antoine Hubert, told Sifted.eu that the money comes from a combination of historical and new investors.

The company’s plan to get to profitability quicker will involve the closure of production facilities in the Netherlands, resulting in 35 job cuts, along with 38 redundancies at its Paris headquarters. The staff affected were told last week.

Research centre

Ÿnsect’s last fundraise was a $372m Series C round in 2021. Hubert says it plans to fundraise for a top-up to this Series D raise across 2023. It now makes Ÿnsect the best-funded insect start-up in Europe, followed by fellow French black soldier fly farmer Innovafeed, which has raised $485m.

Sifted.eu reports that as well as closing its Dutch production facility, the company plans to turn a profit by building smaller, less software-intensive facilities and altering the products it focuses on.

Ÿnsect acquired Dutch mealworm business Protifarm in 2021. “We found we would need to invest tens and tens of millions to break even on the [Dutch] sites,” Hubert told Sifted. The Protifarm site will now switch to a research centre, meaning all production roles in the country will be cut.

Aside from the closing Dutch farm, Ÿnsect has two farms in France and one in the United States and is currently working on a venture in Mexico.