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Innovafeed becomes world’s biggest bug business with fresh $260m raise

French company grows extra legs with planned US and Asia expansion; Qatar’s sovereign wealth fund leads Series D round

By Éanna Kelly

Innovafeed cofounders Bastien Oggeri, Aude Guo & Clément Ray. Source: Innovafeed

Innovafeed, a French startup that breeds insects to feed animals, has become the world’s best-financed insect-farming business after announcing a fresh $260m investment. 

The Series D raise, the largest ever agritech investment round outside the US, takes the company to $470m worth of financing to date, edging it ahead of French rival Ÿnsect, which has so far raised around $425m.

The round, led by Qatar Investment Authority, also sees contributions from existing investors, Paris-based Creadev and Singapore state-owned fund, Temasek, alongside global agricultural commodity traders ADM and Cargill. 

Innovafeed’s money will go into building insect farms in the US and Asia, with the company targeting up to 20 sites, cofounder Bastien Oggeri tells Sifted. 

Created in 2016, Innovafeed operates two plants in northern France that convert the larvae of the black soldier fly into thousands of tonnes of insect oil and meal for pets, fish, chickens and pigs. This fly is commonly found in Europe and considered extremely adaptable, for its ability to eat any kind of waste food. 

The company, in the process of establishing a facility at a corn-processing site in the US, says it has signed contracts worth more than €1bn over the next 10 years.

Other funds contributing to the round include Future French Champions (a joint venture between Qatar Investment Authority and Bpifrance), ABC Impact, IDIA Capital Investissement and Grow Forward. La Caisse d’Epargne Hauts de France, Groupe Crédit Agricole, BNP Paribas, Arkéa and Société Générale contributed €38m in debt financing.

More wriggle room

Money for insects continues to creep up in Europe.

Besides Ÿnsect, Dutch insect farmer Protix has raised over $100m to date. Global competitors include Canada’s Enterra Feed and US company EnviroFlight. 

Insect products are high in nutrients and seen as a climate-friendly way of feeding fish and animals because the process uses maggots fed with agricultural byproducts, like rotting vegetables, on a fraction of the land needed for livestock. Soy and fishmeal, the traditional bedrock of animal feed in Europe, require a lot more space and can be harmful to the environment. 

“Every factory we build, it’s around 50k tonnes of CO2 avoided,” Oggeri estimates. 

Climate campaigners say we’re cooked unless the world finds more sustainable food to eat. But for now, insect producers are focusing mainly on feed for animal and fish consumption, rather than food for humans.

Protein producers are testing consumers’ appetite for wriggly snacks, but Oggeri says it will take time before there’s an insect market in the west that extends beyond food adventurers. “We won’t replace your burger at the moment — but we can start with snacks and sport nutrition [food],” he says. 

Animal feed opportunities are growing, meanwhile, as lawmakers remove barriers on who can eat insects. Insect firms are targeting the US market because of recent regulation there allowing the use of black soldier fly in food for dogs. Last year the EU authorised the use of insect protein in poultry and pig feed.

Rabobank, a Dutch lender, predicts that global insect production could reach 500k tonnes a year by 2030, up from just 10k tonnes in 2020.

Éanna Kelly is a contributing editor at Sifted. He tweets from @EannaKelly1

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