Insect farming faces crisis as top startups struggle to secure financing 

GLOBAL – Two of the world’s most well-financed insect farming startups, Agronutris and Ÿnsect, are teetering on the brink of collapse, dealing a significant blow to the emerging alternative protein sector.

Agronutris recently announced that its holding company, EAP Group, has entered safeguarding proceedings—a measure taken when a company faces potential insolvency. 

Agronutris operates a black soldier fly pilot farm in Toulouse, primarily producing protein for aquaculture feed and pet food. 

The company raised €100 (approximately US$103.2) million in 2021 from major investors, including the French public bank BPI France and investment manager Mirova. 

However, the economic climate has since shifted unfavourably, making funding harder to access.

“Access to funding has become harder due to an uncertain economic context and investments that have been curbed by the latest news in the industry, and the announcements made recently by other industrial actors,” Agronutris stated.

Ÿnsect, which has mealworm farming sites in Dole and Amiens and employs 214 people, is also struggling. A tender offer issued on January 17 detailed the company’s urgent need for €130 (approximately US$134) million. 

Despite raising nearly €600 (approximately US$619) million since its 2011 inception, Ÿnsect generated only €5.8 (approximately US$6) million in revenue in 2023 while carrying third-party liabilities of around €104 (approximately US$107.3) million. 

The company could face court-imposed restructuring, forced asset sales, or liquidation without new investors.

Despite boasting the largest intellectual property portfolio in the sector, with two research centres in France and the Netherlands, as well as production sites in France and the United States, Ÿnsect’s financial woes highlight the volatility of the insect farming industry. 

The company even expanded into pet food with its Sprÿng brand last year but has yet to achieve financial stability.

Insect farming secured an impressive US$68 million in investment in 2024, yet these struggles could signal a downturn for the industry. Concerns over ethics and efficiency further complicate matters. 

Anthony Field, head of Compassion in World Farming UK, warned that insect farming may divert human-edible food sources, such as grains and soy, which could be better utilised for direct human consumption.

Dustin Crummett, executive director of the Insect Institute, echoed this sentiment, arguing that large-scale insect farming introduces inefficiencies by adding an unnecessary trophic level to the food system. 

Recent evidence suggesting insect sentience has also raised ethical concerns about welfare and humane slaughter practices.

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