High-profile French industrial scaleup Ÿnsect, which has raised over $600m to date to farm insects and transform them into proteins, has entered a ‘procédure de sauvegarde’ (safeguarding proceedings) — a voluntary procedure that occurs when a company is at risk of insolvency.
A ‘procédure de sauvegarde’ takes place before a company is insolvent and is intended to reorganise the business as it faces financial difficulties.
An administrator has been appointed to oversee the procedure, which starts with a period of observation during which the company’s activities will continue normally. This lasts for six months (which can be renewed), with the objective of establishing a restructuring plan.
“Facing a complex economic and financial conjecture, which is characterised by the drying up of funding usually directed to high-growth companies, Ÿnsect has obtained the opening of a ‘procédure de sauvegarde’,” the company said in a statement.
Ÿnsect had been looking to secure funding for several months to fund the launch of its first industrial plant Ÿnfarm.
In August, the company’s cofounder Antoine Hubert told Sifted that finding fresh cash has been a major challenge.
“There are no more investors on the market,” Hubert told Sifted at the time. “It’s felt like running in a corridor with thousands of doors on each side, and the more you run, the more they shut.”
Launching Ÿnfarm
Ÿnsect announced Ÿnfarm in 2020 — an ambitious 45sqm industrial site that is designed to produce 200k tonnes of insect protein per year.
It’s been a costly project, which kicked off with a $372m Series C raised in 2020, followed by a $160m Series D raised in 2023.
This, however, fell short of the investment needed by the company to finalise the building of Ÿnfarm and the ramping up of production.
At the start of 2024, the company closed a first extension round. Two sources with direct knowledge told Sifted that the fundraise amounted to €50m, which Ÿnsect declined to confirm.
Since then, operations have kicked off at Ÿnfarm, but Hubert previously told Sifted that the company still needed more funding to cover the farm’s fixed costs and Ÿnsect’s 260 employees’ salaries while production ramps up.
At the time, the founder said that he was planning to close another extension by the end of this year.
“Ÿnsect is in advanced discussions with a number of investors that are keen to accompany and fund the launch phase of its industrial process,” the company said in a statement. “The delays that are inherent to the realisation of this fundraise, however, have turned out to be incompatible with the financial pressure suffered by the company.”
“The opening of a ‘procédure de sauvegarde’, during which operations will carry on as normal, will enable the company to benefit from the necessary time to finalise the discussions relevant to this new fundraise.”