Embattled French startup Ÿnsect has secured €8.6m in bridge funding from historical investors to stay afloat until the end of the year.
The company, which farms insects and turns them into protein ingredients for human and animal food, is also laying off 111 of its 194 workers and pausing a large part of its flagship factory Ÿnfarm to test a new model for farming insects with lower production costs.
Ÿnsect has faced growing financial difficulties for nearly a year, and in February filed for insolvency and put out calls to sell for parts.
The company says the new funding, which follows €10m in bridge funding it secured in April, will enable it to stay operative until the end of 2025.
“We are putting in place the ingredients of a possible relaunch of Ÿnsect’s activities,”Ÿnsect’s CEO Emmanuel Pinto said in a statement.
Ÿnsect presented its plan to the French commercial court in charge of the case earlier this week. The court agreed to the project and scheduled a hearing at the end of September to evaluate the initial results of the new farming model.
The court also greenlighted an offer from Keprea, a company founded last year by Ÿnsect cofounder Antoine Hubert, to buy Ÿnsect’s pilot factory dedicated to R&D in Dole in eastern France.
Ÿnsect’s relaunch
Ÿnsect has raised more than €600m to date, but since 2023 has struggled to find funding to bring Ÿnfarm, which launched in 2020, to full capacity.
Ÿnfarm is a huge 45k square metre industrial plant and includes complex technologies to automate insect farming, which means the company has struggled to bring production costs down in a sector where established competitors can sell protein ingredients at low prices.
Under the new plan most of Ÿnfarm’s operations will be put on hold while a cheaper method to farm insects is implemented, based on a model proposed by a partner company based in Germany.
The new funding will enable Ÿnsect to validate the performance of the new model and land contracts with large customers. The company is still searching for €24.4m in additional funding to back a longer-term recovery plan once volumes increase and production costs lower. The €8.6m in bridge funding also falls short of the €10m it was looking for.
Florent Dupriez, head of research and development (R&D) in health and biosafety at Ÿnsect, who represents the company’s staff and is included in the layoffs, tells Sifted the plan proposed by the company leaves many questions unanswered.
“The executive team was looking for €10m. The fact they only obtained €8.6m shows investors are at the end of what they can fund,” he says. “They won’t be able to fund the additional €24.4m, and no new investor has shown interest over the past year.”
He adds the short amount of time given by the court could compromise the success of the new method trialled by Ÿnsect.
“The next hearing is in less than three months. That’s an extremely short amount of time to realise a complete lifecycle for the insects,” says Dupriez.
“We will need to be vigilant when it comes to the veracity of the test results that will be presented during the hearing.”
Read the orginal article: https://sifted.eu/articles/ynsect-bridge-round-mass-layoffs/
