MUNICH — On Oct. 23, FarmInsect, a German insect technology company, announced the closing of its series A funding round, raising €8 million ($8.48 million USD). The company plans to use the funds to scale up its commercialization as it aims to provide the animal feed, aquaculture and pet food industries with more sustainable ingredients.
According to FarmInsect, the agriculture industry heavily contributes to the global rise in carbon emissions through production and global transport of animal feed, soybeans and fishmeal. Producing soybeans, which are used widely in animal and pet food products, utilizes extensive land and energy, according to the company, making it increasingly less sustainable as demand for these products increase globally.
FarmInsect seeks to offer a more sustainable protein alternative for various animal feed industries using black solider fly larvae (BSFL) and a decentralized production process controlled by individual insect farmers.
Founded in 2020, FarmInsect was one of the founding companies of the Technical University of Munchi’s Food, Agro and Biotech Venture Lab. The company offers a modularized, end-to-end solution for on-site insect production, which utilizes stranded energy and onsite feedstocks.
Since its inception, FarmInsect has developed leading breeding practices and genetic insect strains for use in the animal feed and other industries. Through the company’s offerings, customers can construct modular insect farms at their own facilities. FarmInsect provides its customers with weekly shipments of seed larvae, which insect farmers then fatten onsite with their own food waste materials and farm into ingredients for use in feed.
According to FarmInsect, this method allows for more circularity, producing high-quality and protein-rich ingredients made directly onsite for a lower cost and lower carbon emissions compared to relying on a global supply chain. It also allows farmers to save up to 30% on feed costs, according to FarmInsect, and produces a compost byproduct, which farmers can use or sell as fertilizer or in biogas production.
The company’s series A funding round was led by Sandwater, a climate-tech capital firm, Bayern Kapital’s Growth fund, the Minderoo Foundation’s Strategic Impact Fund, and the European Innovation Council Fund.
“We’ve recognized the commercial and environmental potential of insects for a long time,” said Morten E. Iversen, partner at Sandwater. “But we struggle with the existing business model, which involves substantial capital investment and has proven difficult to scale. We were missing a commercially available, low CapEx solution capable of driving meaningful volumes, and FarmInsect offers just that. We strongly believe in the founders’ ability to scale FarmInsect and accelerate the transition away from CO2 intensive protein sources.”
Monika Steger, managing director of Bayern Kapital, said, “One thing was clear to us even with our first stake around two years ago: Insect-based feed is a key part of the puzzle for sustainable and futureproof agriculture. FarmInsect’s experienced team developed the company in a very positive way, installed the first customer systems and opened a new production site. We are highly satisfied with the collaboration to date and see a lot of potential for the future.”
Existing investors HTGF and UnternehmerTUM Funding also participated in the funding round.
“We were impressed by FarmInsect’s founders as well as its low CapEx, decentralized business model which has the ability to ramp up significant insect production in a sustainable way, providing the ability to deliver a scalable alternative source of protein to fishmeal,” said Cronje Wolvaardt, director of impact investing at the Minderoo Foundation. “This aligns with Minderoo’s goal to protect and restore ocean ecosystems, including by reducing pressure on wild caught fisheries.”
FarmInsect plans to use the capital to scale its insect farming solution for commercialization and invest more in research and development to enhance its technology.
“We are very grateful for the trust that our investors have placed in us,” said Thomas Kuehn, founder and chief executive officer of FarmInsect. “Together we will pursue our ambitious goal to make insects the go-to protein source ahead of soy and fishmeal in the European Union. In this next stage, we plan to intensify our R&D activities in order to decisively expand and further improve the current breeding lines.”
Read more about the latest advancements in insect production for pet food.