Ÿnsect
French insect farming startup that raised over $600 million to produce insect-based protein, placed into judicial liquidation (bankruptcy) in late 2024. Ÿnsect exemplifies premature industrial scaling - building a 'giga-factory' before proving unit economics or choosing a target market.
The company suffered from fatal niche indecision, spreading across three distinct markets with different economics: animal feed (commodity, price-driven), pet food (premium, sustainability-receptive), and human food (via 2021 Protifarm acquisition). Animal feed proved unviable - insect protein adds an expensive intermediate step to cereal by-products already usable as feed. By the time Ÿnsect pivoted to higher-margin pet food in 2023, it had already committed hundreds of millions to Ÿnfarm, a factory optimized for the wrong market.
Peak revenue reached just €17.8 million in 2021 (reportedly inflated by internal transfers) against a 2023 net loss of €79.7 million. The company represents what Professor Joe Haslam calls Europe's scaling gap: 'We fund moonshots. We underfund factories. We celebrate pilots. We abandon industrialization.' Robert Downey Jr.'s FootPrint Coalition and impact investors bought the sustainability vision, but the economics of commodity animal feed simply couldn't support premium insect protein.
Key Leaders at Ÿnsect
Antoine Hubert
Co-founder & CEO
Led company through growth phase; replaced as CEO after 2023 pivot failed to save company
Shankar Krishnamoorthy
CEO
Former Engie executive brought in to oversee Ÿnfarm launch; became CEO after Hubert
Cautionary Notes on Ÿnsect
- Raised $600M+ but peak revenue only €17.8M (2021)
- 2023 net loss of €79.7 million ($94M)
- Built giga-factory before proving unit economics
- Fatal niche indecision - couldn't choose between animal feed, pet food, and human food
- Animal feed is commodity market - sustainability premiums don't apply
- 2021 Protifarm acquisition added third market segment while revenue growth was desperately needed
- 2023 pivot to pet food came too late - capital already locked in wrong infrastructure
- Revenue reportedly inflated by internal subsidiary transfers
- Insect protein for animal feed adds expensive step to already-usable cereal by-products
- Example of Europe's scaling gap: funding moonshots but abandoning industrialization
- Celebrity investor (Robert Downey Jr.) and impact focus couldn't override market economics
- Judicial liquidation in 2024 despite 10+ years of operation
- Competitor Innovafeed survived by scaling incrementally from smaller facilities