Serie A: FarmInsect secures 8 mn. Euro for insect breeding facilities
Munich, Germany — Munich-based FarmInsect, a company specializing in insect production, has announced the closing of an oversubscribed €8 million Series A financing round. The round was led by Oslo-based ClimateTech venture capital firm Sandwater with participation from the Bayern Kapital-managed Growth Fund, the Minderoo Foundation’s Strategic Impact Fund, and the European Innovation Council’s EIC Fund. Other participants were the previous investors HTGF and UnternehmerTUM Funding for Innovators.
A large part of the CO2 emissions generated in agriculture is due to the production and global transport of protein-rich feedstuffs such as soy and fish meal. In the process, the cultivation of soybeans, which are often used in livestock and pet food, is accompanied by extensive land clearing, often through deforestation. The production of fishmeal involves energy-intensive processing and further overfishing of wild fish stocks.
Small insect, big effect
FarmInsect GmbH, founded in 2020, offers a more sustainable alternative protein source for animal feed — namely the larvae of the black soldier fly. Unlike most other companies involved in insect farming that build mega-factories for their purposes, FarmInsect focuses on decentralized production to make the most of previously unused energy and locally available residues for insect fattening, putting these solutions directly in the hands of farmers.
With this in mind, FarmInsect has developed a complete solution that allows customers to set up modular insect masting systems on-site at their own farms. FarmInsect supplies its customers weekly with young larvae that are fattened on site with regional residues such as shells or crop residues, thus increasing their body weight by more than 250 times within one week. This material cycle means that high-quality, high-protein feed is produced directly on site at the farm, all at lower cost, with lower CO2 emissions and completely independent of global supply chains.
FarmInsect’s fattening facilities also produce compost as a byproduct, which can be sold as a high-quality fertilizer or used to produce biogas. Overall, FarmInsect solutions can help farmers reduce their feed costs by up to 30%. Each process step is monitored via a dedicated FarmInsect software platform that guides customers step-by-step through production.
Fresh capital to expand market presence and continue research and development work
FarmInsect will use the capital from the financing round to commercially scale up its insect breeding facilities, as well as for research and development work to further improve its technology.
Thomas Kuehn, founder and CEO of FarmInsect, is pleased with the additional funding and the external validation of his company’s potential. “We are very grateful for the trust our investors have placed in us. Together, we will pursue our ambitious goal of making insects the preferred protein source in the EU ahead of soy and fish meal. As a next step, we intend to intensify our research and development efforts to significantly expand and improve current breeding lines.”
“We recognized the economic and ecological potential of insects some time ago. However, the previous business models, which require significant investments and are difficult to scale, have given us a bellyache. What we lacked was a commercially available solution that required little investment and was suitable for high production volumes. FarmInsect offers exactly this solution. We are absolutely convinced that the company’s founders are capable of scaling FarmInsect and accelerating the transition away from CO2-intensive protein feed,” explains Morten E. Iversen, shareholder at Sandwater.
“One thing was already clear to us when we first became involved about two years ago: insect-based feeds are one of the most important pillars of sustainable and future-proof agriculture. FarmInsect’s experienced team has developed the company in a very positive way, installing the first equipment at customer sites and opening a new production site. We are extremely satisfied with the cooperation so far and see great potential for the future,” says Monika Steger, Managing Director at Bayern Kapital.
We were very impressed with the founders of FarmInsect and their decentralized business model with low investment costs that has the potential to significantly increase insect production in a sustainable way, providing a scalable alternative protein source to fishmeal. This is in line with the Minderoo Foundation’s goals to protect and restore marine ecosystems, including by reducing overfishing of wild fish stocks,” explains Cronje Wolvaardt, Director of Impact Investing at the Minderoo Foundation.
Founded in 2020, FarmInsect GmbH is a Munich-based company specializing in insect breeding systems. She was part of the founding cohort of the Venture Lab Food-Agro-Biotech (FAB) at the Technical University of Munich. FarmInsect offers a complete modular solution for decentralized on-site production of insect larvae. Through a consistent focus on innovation, FarmInsect has developed industry-leading insect breeding techniques and genetic strains with improved adaptability to locally available larval forage. FarmInsect customers can reduce their feed costs by up to 30%, better utilize organic waste in a material loop, and generate additional revenue streams from the resulting manure, from biogas, and from selling larvae to third-party processors.
For more information about FarmInsect, visit farminsect.eu.
Sandwater (Oslo, Norway) promotes companies that are leading the way in climate protection and improving healthcare systems worldwide. Sandwater typically invests in European companies in the late-seed to Series A financing rounds and has made twelve investments to date from its current fund. As a thematic investor with a commitment to social or environmental impact in its investments, Sandwater focuses on four core areas: resource efficiency, energy transition, impact enabler and health.
About Bayern Kapital
Bayern Kapital GmbH (Landshut) is the venture capital and growth investor of the Free State of Bavaria. It supports innovative high-tech companies in Bavaria in their various growth phases, from the seed to the later-stage phase, with equity capital in the amount of 0.25 to 25 million euros. Since its foundation in 1995, Bayern Kapital GmbH has invested around 450 million euros in approximately 300 start-ups and scale-ups from sectors such as life sciences, software & IT, materials, nanotechnology and environmental technology.
About the Minderoo Foundation
The Minderoo Foundation (Perth, Australia) confronts difficult issues and grand challenges with the goal of effecting profound change. Founded by Andrew and Nicola Forrest in 2001, the Minderoo Foundation is proud of its Australian background. It is independent and forward-looking, seeking effective, scalable solutions. It seeks to dismantle the systems that promote inequality and inequity through courageous, collaborative, and selfless action. The Minderoo Foundation stands for cooperation, commitment, innovation and engagement to create a more just future. www.minderoo.org
About the European Innovation Council (EIC)
The European Innovation Council (EIC) Fund, initiated by the European Commission, is used to make investments in a wide range of technologies and sectors in all EU member states as well as in countries that have concluded an association agreement with the EU to participate in the EU’s Horizon Europe framework program. The primary purpose of the EIC Fund is to support companies in the development and commercialization of disruptive technologies to fill critical financing gaps and spread risks more broadly by building a large network of capital providers and strategic partners suitable for co-investment and follow-on financing.
About UnternehmerTUM Funding for Innovators
UnternehmerTUM Funding for Innovators is the pre-seed funding initiative of UnternehmerTUM, Europe’s leading center for start-up and innovation. The initiative supports outstanding B2B startups in the (deep) tech sector in their early stages with the required capital and strong network from the UnternehmerTUM ecosystem. Offerings include grants for prototype development, startup-friendly convertible bonds, and follow-on financing. The primary focus is to identify breakthrough technologies and exceptional teams that have the potential for venture capital investment. funding.entrepreneurship.com
About High-Tech Gründerfonds
The seed investor High-Tech Gründerfonds (HTGF) finances technology start-ups with growth potential and has supported more than 700 start-ups since 2005. With the launch of the fourth fund, HTGF has around 1.4 billion euros under management. The team of experienced investment managers and start-up experts supports the young companies with know-how, entrepreneurial spirit and passion. The focus is on high-tech start-ups in the fields of digital tech, industrial tech, life sciences, chemistry and related business areas. To date, external investors have invested around EUR 5 billion in the HTGF portfolio in more than 2,000 follow-on financing rounds. In addition, the fund has already successfully sold shares in more than 170 companies.
Fund investors in the public-private partnership include the German Federal Ministry for Economic Affairs and Climate Protection, KfW Capital, and 45 companies from a wide range of industries.