Spanish startup InsectBiotech has raised €7.2 million ($8.3 million) to build a new facility in Andalusia using black soldier fly larvae to convert byproducts from the olive oil industry and other ag side streams into protein, oil, and fertilizer.
The round, which includes participation from Arcano Partners through the Impact Andalusía Innovation fund and undisclosed US investors, will support the construction of a site capable of processing up to 7,500 tons of agricultural by-products a year, said cofounder and COO Ben Brown.
The plant—which should be operational in Q3, 2027—”marks a significant step in the company’s transition from research and pilot operations to commercial-scale manufacturing,” said Brown. The site will produce 1,300 tons of fresh larvae per year, which translates to 300 tons of high protein meal. This will be followed by a ramp up to 10,000 tons of larvae.
“Close to a dozen LOIs (letters of intent) have been signed,” Brown told AgFunderNews. “The main off takers will be aquaculture, swine, poultry and pet food for protein; vineyards and high rotation crops (berries) for the frass; and biodiesel companies for the oil.”
Feedstock and energy
Formed by Tobias Webb, Ignacio Gavilan, and Ben Brown in 2022, InsectBiotech realized pretty quickly that the unit economics of farming black soldier fly larvae (BSFL) for protein, oil, and frass, only make sense if you can “solve two big problems: feedstock and energy,” said Webb.
“It hit Ben when he was driving through Andalucía [in southern Spain]. He rang me up and said, I’ve figured it out. There’s a huge amount of olive waste [pomace left over after olives are crushed for oil], and endless solar energy, giving us both feedstock and low energy costs in a region of Spain that really needs jobs, factories and investment.”
Brown added: “Olive oil production waste continues to be abundant throughout Spain. In standard seasons, processing actors (orujeras) collect the waste to extract residual pomace oil and use the dry cake for biomass, paying mills an amount per ton. There are approximately five million tons of waste every year, enough for several uses and users at a very reasonable cost. We have also further reduced supply risk by securing long-term agreements with processing plants to ensure reliable access over the long term.”
Olive pomace
While several players at that time were arguing that the future of insect ag lay in vast, highly-automated—and very pricey—facilities that look like Amazon warehouses, Webb, Gavilan, and Brown started running the numbers and concluded that a lower-tech, medium-sized facility making 2,000+ tons of protein and 4,000 tons of frass (insect waste that can be used as a soil amendment) powered by renewable energy made the most sense for InsectBiotech.
“Andalucía produces the largest amount of olive pomace residue in the world in one place, but everyone we spoke to said we couldn’t use it as a feedstock. But we found a low-cost way of using green chemistry to make it digestible by removing anti-nutritional factors.”
According to Brown, the mechanical process is “highly economical, enabling feed costs of up to one-quarter those of conventional wheat-based formulations. As the technology is protected by an approved patent, it’s our secret sauce.” While the pomace has to be supplemented with some additional amino acids for balance, it accounts for 95% of the feedstock.
For energy, the plan is “to have 75-80% solar given the abundance of sunlight in southern Spain with more then 3,000 hours/year,” said Brown. “This will be supplemented with gas as needed.”
For neonates (infant BSF larvae) the aim is to “have a 50/50 split [of infants produced in-house and brought in from specialist hatcheries] to de-risk supply,” he said. “I think where this ends up is a bit like the poultry industry where you have rearing farms and people buy a few day-old chicks. I think genetics [of BSF for protein production] will also definitely get better.”
Second-generation insect ag
Stepping back, said Brown, players entering the insect ag space today benefit by being later to the game, as pioneers had to build the plane while flying it. The second wave of players can learn from their mistakes and work with firms that have built up specialist expertise in areas from breeding and genetics to infrastructure.
Today, he added, firms can buy off the shelf solutions from a number of different vendors.
“Our view is that the winning BSF farming model combines true agricultural waste as feedstock, low-opex EU production close to raw material sources, modular facility build-out, and hybrid technology that balances automation with skilled human resources, using efficient BSF production to deliver products that compete on cost, not sustainability alone.”
Commercially viable insect farming is not about a single breakthrough, but a complex of factors, said Brown. InsectBiotech’s model favors modular construction enabling capacity to be added gradually, cheap, abundant, pre-aggregated feedstocks, competitive labor costs and job creation in Just Transition zones, solar-powered operations, and “cost-competitive products aligned with mainstream demand versus premium pricing in niche markets.”
Longer term, he said, InsectBiotech aims to be a global player, utilizing olive pomace in several regions where olives are grown. “We’re not interested in having one small farm; we’re looking at a global stage. The plan is to have five farms in Spain, but potentially in Portugal and other olive pomace jurisdictions, which is about half dozen countries.”
Further reading:
Insect ag recalibrates after a brutal shakeout: Where are the key players now?
Goterra administrator seeks buyer as founder warns of insect ag sector ‘contagion’
