ADM Capital’s Cibus Fund has 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. Also joining the round are German poultry company PHW Group, and a prominent unnamed Canadian family-owned investment group.
The capital gained through the round will be used by Enterra to help fund the completion of construction of three new production facilities: the first in Alberta, Canada, to be completed in 2019; the second in British Columbia to be completed in 2020; and the third in the U.S. Midwest to be completed in 2021. Each facility is expected to cost $30 million to build, and the funding gained through the deal is expected to raise the company’s valuation to more than $100 million.
Established in 2007, Enterra is a pioneer in its field, being the first company to secure regulatory approval in both the U.S. and Canada for its insect ingredients after extensive trials and data collection. Using recycled pre-consumer waste as feedstock, the company farms and harvests black soldier fly larvae to process into value-added protein products through a sustainable system that reduces food waste.
As aquaculture and poultry producers increasingly seek out more sustainable feed ingredients to replace traditional resource-intensive fishmeal, soybean meal, or palm kernel oil, sales of Enterra’s products have tripled annually. Enterra’s Whole Dried Larvae are able to be fed directly to poultry and birds, or may be mixed with other ingredients as part of custom rations for fish, poultry, or pets. Furthermore, with additional processing, the larvae can be be made into Enterra Meal, or Enterra Oil to be blended into animal feed rations.
The deal will see the Cibus Fund secure a large minority stake in the company, and will form part of its early stage investment mandate according to a company statement.
“The capital will allow the business to scale up its operations with the investment completely aligned with our Cibus Fund, which is designed to invest in rapidly-growing food chain companies that employ smart, sustainable technologies to create high value,” said Alastair Cooper, head of early stage investments at ADM Capital. “It is an ideal partnership, one we are excited to pursue and nurture. Like Cibus, Enterra is about the future of food.”
Only two weeks ago, ADM Capital announced it was exiting its Central Eastern European and Kazakhstan private equity business through a management buyout as a means to position the firm to be better able to focus on its core interests, including the Cibus Fund, which successfully closed on $100 million in May 2017.
Led by ADM Capital co-founders Robert Appleby and Jason Silm, former head of Agribusiness Investment at VTB capital and director at Macquarie Agricultural Funds Management, the fund aims to capitalize upon the significant investment opportunities generated by the ongoing evolution occurring in global demographics and trade patterns, and the inability to meet growing regional demand for high-value foods by some of the world’s fastest growing economies.
Toward this end, ADM Capital told GAI News at the time that the “sweet spot” for the Cibus Fund will be in producers and processors that are seeking growth capital to achieve greater value through both horizontal and vertical integration in the supply chain. This investment in Enterra represents the Cibus Fund’s fifth investment as its works toward its planned final close before the end of this year.
With this investment Enterra plans to build upon its recent rapid growth in the animal feed business, which is valued at $400 billion per year.
“We are very pleased to have successfully led this investment round in Enterra Feed Corporation – a company which has impressed us greatly as it makes vast strides in sustainable food production,” said Cooper. “Converting waste food streams to high quality animal feed protein makes enormous sense for all. We see immense growth ahead for Enterra.”
-Lynda Kiernan