The insect breeding startup Ynsect is raising 160 million euros (or 175 million US dollars) and intends to use it to expand further: They want to move away from the production of animal feed – such as mealworms for fish – and towards “high-margin pet food” and high-quality food ingredients. This in turn should increase profits in the face of rising energy and raw material costs. Ynsect has already secured a total of 625 million US dollars.
costly technology
First and foremost, in the next steps, the company’s own, world‘s largest vertical insect farm, is to be further expanded (we reported). The plant can “deliver” 160,000 tons of insects per year. Ynect chops up the cultivated insects and turns them into proteins for a wide range of areas, from aquaculture to animal husbandry, animal feed, fertilizer and human consumption. The challenge: Insects are considered to be relatively environmentally friendly proteins, but the technology for breeding is still “expensive” and definitely more expensive than plant-based alternatives. In an environment like the one currently prevailing, Ynsect cannot afford “to invest a lot of resources in markets that are the least profitable (classic animal feed, NB), while there are other markets where there is “great demand , good returns and higher profit margins,” says CEO Antoine Hubert.
Fresh funds, fewer jobs
For the time being, around 35 jobs are to be cut despite the new round of financing, and a production facility in the Netherlands is also said to be about to be closed. Around 40 jobs are also to be cut in France, and Ynsect currently has around 360 employees, according to its own statement. Incidentally, the investors in the most recent round are unknown: Ynsect is currently negotiating a second tranche of financing, which should be completed this year. Previous investors include Astanor Ventures, Bpifrance and actor Robert Downey Jr. Ynsect operates farms in France, the Netherlands and the USA, is also expanding into Mexico and is considering a possible entry into Asia – now with a new direction of the business model.
Ÿnsect raises EUR 316 million for the world‘s largest insect farm