How reality crushed Ÿnsect, the French startup that had raised over $600M for insect farming

TechCrunch
TechCrunch
4h ago
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Ÿnsect went bankrupt after failing to build a viable business despite over $600 million in funding and a pivot to pet food markets.
How reality crushed Ÿnsect, the French startup that had raised over $600M for insect farming
A What happened
French startup Ÿnsect was placed into judicial liquidation after raising over $600 million for insect protein production. The company struggled with low revenue, peaked at around $21 million, and sustained a massive net loss of $94 million by 2023. The failed wager on industrial scale production and delayed market focus on pet food led to its downfall, highlighting challenges in scaling deep-tech startups in Europe. Ÿnsect's collapse illustrates the difficulty of turning sustainability visions into profitable commodities amid capital and execution challenges.
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Key insights

  • 1

    Market Mismatch: Ÿnsect struggled because insect protein for animal feed couldn't compete on price, a key driver in that commodity market.

  • 2

    Scaling Challenges: The company's large and expensive production facility was built before business model and unit economics were proven.

  • 3

    Sector Outlook: Ÿnsect's failure does not mean the insect farming sector is doomed; competitors with different strategies are still progressing.

Takeaways

Ÿnsect's failure highlights the importance of aligning industrial scale ambitions with realistic market demands and timing, especially in emerging sustainable technologies.

Topics

Business & Markets Economy Startups/VC Climate & Environment Sustainability

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