French insect protein startup Ÿnsect announced this morning that it has acquired Netherlands counterpart Protifarm, which raises mealworms for human food applications.
At the start of the year, the European Food Safety Authority announced its approval of mealworms for human consumption in the EU. The ruling opens the gateway for the growing startup industry around insect protein to tap into a new market.
With the acquisition of Protifarm, Ÿnsect is aiming to fast-track its manufacturing capacities to take advantage of the recently removed regulatory roadblock.
The Dutch startup was a natural match, according to Ÿnsect chairman and CEO Antoine Hubert.
“There are other smaller players [in mealworm farming] but they do not compare in terms of IP, plant, [and its] vertical farm running for more than four years giving real operational experience. They’ve also acquired a company doing traditional insect farming for 40 years,” he told AFN.
Protifarm holds 37 patents, bringing Ÿnsect’s total portfolio to nearly 300 patents, the companies said in a statement. It also brings a skilled workforce to the table, employing 50 people across production, R&D, and other areas. The Protifarm management team will remain in place and help integrate the business into Ÿnsect.
The Dutch company’s most recent funding was a Series B round in December 2019 led by local development agency Oost NL.
Are athletes the gateway to gaining consumer acceptance?
As insect protein has gained more traction and investor attention, the question remains whether society at large will ever be keen to add creepy-crawlies to the menu. Although many cultures around the world wouldn’t bat an eye at eating bugs, the prospect is taboo for others.
Aware of the potential roadblock, Ÿnsect has opted to start its foray into human food with sports nutrition.
“We have done market studies in Europe and we see that there is real interest from professional to amateur athletes. They are looking for new products to increase their performance while being more protective to the environment,” Hubert said.
“When they see our product, they are very positive and really curious about the category.”
ŸnMeal, its ingredient made from yellow mealworm beetles, is produced specifically for performance and health-related consumption. The product’s high-protein, low-ash content makes it a “highly digestible” ingredient that can be used as a supplement for digestive diseases, according to the startup.
Ÿnsect points to mealworms’ amino acid profile and ability to reduce cholesterol as additional reasons why the health-conscious athletic crowd may be more apt to scarf down ŸnMeal compared to other consumer demographics.
Hubert recently discussed the potential for insect protein in sports nutrition with actor Robert Downey Jr on The Late Show with Stephen Colbert. Downey Jr’s FootPrint Coalition backed the startup’s $224 million Series C round extension last year.
Managing multiple markets
Although human food is a promising market, it’s unlikely to become Ÿnsect’s bread and butter.
“We still see pet food and fish feed being the largest contributor to our revenues in the coming years. Human food will grow progressively 15%, maybe 10%, in a couple of years of revenue,” Hubert said.
The pet food ingredient market is worth roughly $40 billion globally, according to market research firm Grandview.
But with alt-proteins on track to capture 11% of the $1.2 trillion global protein market by 2035, according to recent research from Boston Consulting Group and Blue Horizon, there’s still plenty of promise in feeding insects to humans.
“Together [with Protifarm] we will build a stronger company with more IP assets, more capabilities. We can be everywhere in the spectrum from human food to pet food, fish feed, animal feed, and fertilizer,” Hubert explains.
The deal adds a third production site to Ÿnsect’s roster. It’s also constructing what it claims will be the largest insect farm in the world just outside of Paris. Once complete, the startup says it will have a total production capacity of over 230,000 metric tons of insect-based ingredients per year.
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