The economics of large-scale insect farming have come sharply into focus this week with struggling industry pioneer Ÿnsect “exploring all possible options, including the possibility of a third-party takeover,” while fellow French startup Agronutris has filed a safeguard plan with a commercial court.
The news comes weeks after Canadian cricket farmer Aspire Food Group laid off two thirds of its staff and announced plans to scale back production to conserve cash while it makes improvements to its process.
Founded in 2011 by Antoine Hubert and Alexis Angot, Ÿnsect has raised almost $580 million over the past 13 years from investors including Astanor, BPI France, Crédit Agricole, Upfront, and Robert Downey Jr.’s Footprint Coalition.
The firm, which honed its mealworm farming process at a pilot facility in Dole, France, started protein production at a large-scale facility in Amiens, France, last summer, but needs to secure more funding to get to a scale whereby it can “ensure profitability.”
Ÿnsect, which filed a safeguard plan with a commercial court last September, issued a tender offer on January 17 to determine interest from potential investors or acquirers by February 17, 2025.
According to the document, Ÿnsect’s revenue was €5.8 million ($6 million) in 2023 with “third-party liabilities” of approximately €104 million ($108 million) excluding bonds. “The figures for 2024 are not consolidated for the moment,” said a spokesperson.
The company, which has 214 employees at facilities in Amiens, Dôle, Evry, and Paris, says it needs to secure about €130 million ($135 million), excluding liabilities, to achieve target revenues of €131 million ($137 million) in 2028.
If no investors come forward by February 17, 2025, the company could face court-imposed restructuring, forced asset sales, or liquidation.
The spokesperson told AgFunderNews that it is “important to distinguish between the deadline for the submission of bids and the filing of the balance sheet [a formal declaration of insolvency], which are two different things.”
‘Ÿnsect remains focused on its strategy’
The company—which told us last fall that it was in “advanced discussions with a certain number of investors wishing to support and finance this launch phase of its industrial process”—told us this morning that “Ÿnsect remains focused on its strategy and its determination to rapidly find solutions to prepare the company’s future and meet the demands of a fast-growing market.”
The spokesperson added: “Ÿnsect is still in safeguard proceedings, but its activities are continuing normally, as are discussions with the various investors already identified.
“In this context, the priority of the Ÿnsect teams and the court-appointed administrator remains the same: to explore all possible options, including the possibility of a third-party takeover, in order to boost business and strengthen the company’s position in a demanding economic environment. As is customary in this type of procedure, a call for tenders to find investors or buyers for the disposal plan was published on January 17, to enable the company to sound out the market in parallel with its ongoing discussions with investors.”
The safeguard procedure, overseen by an officer appointed by the court, is designed to help companies that are facing financial difficulties but are not yet insolvent to continue operating and pay off debts.
Agronutris files safeguard plan with French court
Fellow French insect ag startup Agronutris, meanwhile, has filed a safeguard procedure with a commercial court in Sedan for its holding company EAP Group. Based in Toulouse, EAP Group is responsible for Agronutris’ R&D activities and administrative functions. The agreement does not cover the group’s subsidiary Ardennutris, which produces oils and proteins from black soldier flies at Rethel in the Ardennes.
The safeguard procedure, which lasts for six months but can be renewed for an additional six months, gives EAP Group breathing space to restructure, find new investors, and renegotiate its debt.
Agronutris originally focused on human food but later pivoted to focus on aquaculture and pet food. It raised €100 million in October 2021 from backers including SPI fund and the Mirova fund to construct the commercial-scale facility at Rethel, which started production in 2023 and announced partnerships with BioMar (insect meal for aquaculture) and Frayssinet (insect frass for fertilizers).
However, the funding environment has changed significantly since 2021, noted the company, which said in the release that grim news from others players in the segment had further soured investor sentiment. “Access to financing is made more difficult by an uncertain economic context and investors slowed down by the news in the sector and the announcements made recently by other industrial players”.
Agronutris cofounder Cédric Auriol did not respond to requests for comment from AgFunderNews.
This is a developing story, so please check back for updates…
Funding rounds in insect agriculture, 2024 (US dollars):
- Entosystem (black soldier flies, Canada): $42 million
- Protix (black soldier flies, Netherlands): $40 million
- Tebrio (mealworms, Spain): $32.6 million
- FreezeM (black soldier fly neonates for breeding, Israel): $14.2 million
- Nasekomo (insect ag franchisor, black soldier fly neonate supplier, Bulgaria): $8.7 million
- Entocycle (enabling tech for insect ag, UK): $2.6 million
- Oberland Agriscience (black soldier flies, Canada): Undisclosed
Source: Preliminary AgFunder data [disclosure: AgFunder is the parent company of AgFunderNews)
Further reading:
Oberland Agriscience nets new capital to scale Nova Scotia BSFL plant
Worms to wealth? Loopworm scales up insect protein plant, plans recombinant proteins from silkworms
Read the orginal article: https://agfundernews.com/insect-ag-pioneer-ynsect-exploring-all-possible-options-including-a-3rd-party-takeover-agronutris-files-safeguard-plan-with-court
