March 13, 2020

By Lynda Kiernan

Dutch biotech startup, Protix, a breeder of larvae from Black Soldier Flies (BSF) for sustainable animal feed production, announced that it has secured an undisclosed investment from Rabobank Corporate Investment (RCI).

This is a return for Rabo, which has been connected with Protix since its founding, and participated in a €45 million (just under US$50.5 million) funding round for the company in June 2017 along with Aqua-Spark, BOM, and additional unnamed investors. 

Originally introduced to Protix through Shift Invest, Rabobank stated in 2017 that it “has been involved with Protix from its start, and continues to support the insect company today as the core bank in its latest round of funding.”

Founded in 2009 by former McKinsey & Company colleagues Kees Aarts and Tarique Arsiwala, Protix takes its inspiration from nature and uses low-grade organic waste as feedstock to produce insects for the production of high-quality proteins, lipids, and micro-nutrients for use in animal feed rations. Through this process, the company is able to supply a low-impact protein alternative that can serve to help meet growing demand for fish, meat, and eggs from a growing global population.

“We consider Protix an absolute front-runner in this sector,” Joost Vogels, investment manager at Rabo Corporate, told Bloomberg. “It solves two key challenges: How to produce food in a sustainable way and how to reduce food waste.”

All the Buzz

Although still far from being mainstream in Western cultures, the numerous benefits of sourcing protein from insects – and the EU Commission’s approval of insect-derived protein for inclusion in aquaculture feed rations on December 13, 2016 – has prompted a range of startups in the space and has sparked interest in the investment universe.

This growing acceptance has been reflected in the number of startups coming online and larger investment rounds.

Companies including Dutch biotech startup Protix, Irish biotech startup Hexafly, and French startups NextProtein and Ynsect have all been raising capital since 2016. More recently, the industry has been gaining traction, with larger investments from more high-profile investors. 

In June 2018, AgriProtein Holdings UK set a new high in investor commitment to the sector when it raised $105 million. Less than a year later, in January 2019, AgriProtein went on to acquire Millibeter N.V., a Belgian insect feed company, for an undisclosed amount.

In August 2018, ADM Capital’s Cibus Fund, which closed at  $452 million in funding, led a significant funding round for Enterra Feed Corporation, a top developer and producer of sustainable insect-based feed ingredients for the aquaculture, pet food, and poultry feed industries.

And more recently, in October 2019, Thai Union, the world’s largest producer of shelf-stable tuna products, launched a $30 million food tech venture fund, and has made its first investment in Flying SpArk, an Israeli insect-based alternative protein startup.

Working the Bugs Out

Protix stated that the capital raised from RCI will be used to scale up production of insect proteins and oils at its new plant opened last summer in Bergen Op Zoom, in the Netherlands, and also to fund the international expansion of its business, as well as to strengthen its R&D, business development, and engineering. 

Aarts told Feed Navigator, “We want to expand outside of the Netherlands – in Europe, and in North America – and we are also considering franchising our technology to investors in Asia and South America. The latter is in development, and we will communicate more about it at the end of the year, or early 2021.”

This international expansion, however, won’t come cheaply. Aarts told Bloomberg that within the next three-to-four years the company will need investments of as much as 150 million Euro ($168 million) to fund the establishment of its large-scale facilities. 

– Lynda Kiernan is Editor with GAI Media and daily contributor to the GAI News and Agtech Intel platforms. If you would like to submit a contribution for consideration, please contact Ms. Kiernan at lkiernan@globalaginvesting.com.