The commercial court supervising French insect ag pioneer Ÿnsect as it restructures its operations has extended the observation period until January 12, 2026. Fellow French insect ag firm Innovafeed, meanwhile, says its plans to build a large-scale plant in the US are “very much alive.”
Ÿnsect entered insolvency proceedings in February after failing to secure financing under a safeguard plan agreed with the court in Évry last year, and is currently under judicial administration.
Under French law, the “observation period” refers to the legally defined window in which a firm is under court-supervised protection, but still operating while options for restructuring are evaluated.
A spokesperson told AgFunderNews that during a Sept 15 hearing, “Ÿnsect presented the progress of its business plan aimed at adapting the company to the financial and commercial market context. In particular Ÿnsect has made significant progress in terms of competitiveness.
“Operational tests of a new breeding method have shown a reduction of more than 70% in the production cost of insect larvae, exceeding expectations.”
‘The final sprint’
The company—which secured a €10m ($11.7 million) bridge loan from existing investors in April and an €8.6m ($10.1 million) bridge loan in June accompanied by mass layoffs—is now focused on two things, said the spokesperson: “Continuing negotiations with major players in the agri-food industry who are closely monitoring the progress made, and reorganizing the balance sheet.”
Emmanuel Pinto, a partner at French turnaround advisory D&I, who was brought in to replace Ÿnsect CEO Shankar Krishnamoorthy in the spring, said: “We have demonstrated that we are able to adapt our organization and processes to meet the need for competitive and more sustainable alternative proteins.
“We are now focusing on securing our markets, our financing needs and reorganizing the company’s balance sheet. The entire Ÿnsect team is mobilized to take on the challenge of the final sprint.”
New, lower-cost production model
Founded in 2011 by Antoine Hubert and Alexis Angot, Ÿnsect has raised more than $600 million over the past 13 years from investors including Astanor, BPI France, Crédit Agricole, Upfront, and Robert Downey Jr.’s Footprint Coalition.
The firm, which honed its mealworm farming process at a pilot facility in Dole, eastern France, started protein production at a large-scale facility in Amiens, northern France, last summer, but needs to secure more funding to get to a scale whereby it can reach profitability.
In June, the court in Évry approved a partial sale of the pilot site in Dole to a biosolutions firm founded by former Ÿnsect executives including Antoine Hubert.
It also approved a plan that included significant layoffs and the assignment of part of the factory in Amiens to test a new model for farming insects with lower production costs.
The company is reportedly still searching for €24.4m ($28.6 million) in additional funding to back a longer-term recovery plan.
Innovafeed: ‘Preparing for scale-up in partnership with ADM’
Fellow French insect ag firm Innovafeed, which recently paused operations at a pilot plant next to an ADM corn milling plant in Decatur, Illinois, told AgFunderNews that the plan to build a commercial scale black soldier fly larvae facility at the site “remains very much alive.”
The company—which uses wheat byproducts from a co-located Tereos starch processing plant as its feedstock at its commercial-scale BSFL facility in Nesle in France—has been testing corn byproducts from ADM as its feedstock for the US plant.
A spokesperson told us: “The pause at our pilot facility [in Decatur] is directly linked to the conclusion of our R&D program there. We successfully validated our process with corn feedstocks at pilot scale, which was the primary mission of our North American Insect Innovation Center (NAIIC). This milestone gives us the confidence to now focus on the next phases of development with ADM, with a focus on pet food markets, and our industrial project in Decatur.”
The spokesperson added: “The [$11.8 million] USDA grant we received [to support construction of an production plant for fertilizer from insect manure at the Decatur site] remains fully in place. An additional grant that did not materialize was intended as complementary support; it was not critical to our operations or strategy.
“Rather than maintaining the pilot facility beyond its core purpose, we chose to concentrate resources and take the time needed before re-starting operations at NAIIC and launching the industrial project within the next 18 months.”
As for staffing, said the spokesperson, “About 20% of the team [at NAIIC] has been retained and relocated internationally or to Paris. For the other colleagues, the transition was managed under good terms, and we would be very glad to welcome them back should they wish to rejoin when the project resumes.
“In short, this is not a step back but a natural transition: we’ve achieved the objectives of the pilot, secured validation of our process, and are now preparing for scale-up in partnership with ADM.”
Asked about the timetable for the large-scale facility in Decatur, the spokesperson added: “The precise timeline will be communicated later. Both partners remain aligned and committed to the long-term project.
“At Nesle, we continue to expand capacity following our third extension. We recently announced a partnership with BioMar and Auchan to bring more sustainable shrimp to market.”
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