July 7, 2020

By Lynda Kiernan, Global AgInvesting Media

In business for only three years, Bulgaria-based Nasekomo is already scaling up its business that transforms agro organic waste streams into alternative protein for animal and fish feed, and sustainable organic fertilizer through the use of black soldier flies. 

In support of its proprietary robotized insect rearing technology, Nasekomo announced it has secured EUR 4 million (US$4.5 million) in funding from Morningside Hill and New Vision 3 – two venture capital funds backed by the Fund of Funds in Bulgaria.

This round, which represents the largest early-stage agtech funding in emerging Europe, brings total funding for the company to-date to EUR 5 million (US$5.65 million).

With eyes toward a sustainable future, and the belief that insects are a scalable and natural solution to the challenges being faced by the feed industry, Nasekomo creates an environmentally positive circular economy. 

“We have spent the last three years developing unique solutions for the insect rearing market,” said Marc Bolard, co-founder and technology lead, Nasekomo. “Nasekomo has leveraged robotics, AI, and big data which allow us to produce insect protein efficiently. We will not only be competitively producing large volumes, but also addressing the challenges of our world related to animal feed.”

The company leverages proprietary robotized insect-rearing technology, AI, big data, and selective breeding programs to raise black soldier flies that are fed using local agricultural by-products to create a protein source for poultry, pigs, fish, and pets. The scalable system not only uses a minimum of water, but eases the pressure on wild-caught sources of protein for fish feed, and the deforestation resulting from soybean production for animal feed. 

“Insects are part of the natural diet for many animal species,” said Olga Marcenac, co-founder, Nasekomo. “They now represent an opportunity to become a sustainable solution to supply the proteins that the world is increasingly consuming. Instead of increasing wild fish catch in oceans and deforesting to plant soy, we can feed insects with local agricultural by-products with extremely limited water consumption, and produce high-quality sustainable proteins for fish, poultry, pigs and pets.”

Marcenac continued, “This local-loop vertical farming has clear environmental benefits and will build greater resilience of the European food chain. Thus, our business model is not only profitable but will have massive positive impacts on society in the long term.”

Bullish on Bulgaria

Backing Nasekomo are two regional venture capital firms – Morningside Hill Ventures, which led the deal, and New Vision 3.

Morningside Hill is a sector agnostic fund with a team bringing significant international experience in generating long-term value, and helping innovative disruptors identify and pursue new opportunities. With EUR 28.6 million (US$32.3 million) under management, the fund looks to provide venture capital to between 15-20 Bulgarian startups in exchange for minority positions.

EUR 24.1 million (US$27.2 million) of this fund is provided by the EUR 660 million (US$745 million) Fund of Funds in Bulgaria, managed by Fund Manager of Financial Instruments in Bulgaria EAD (FMFIB) – tasked with structuring and managing financial instruments, co-financed by the European Structural and Investment Funds during the 2014-2020 period. 

“We are thrilled to support an experienced team of entrepreneurs with several highly successful enterprises under their belt. In their newest venture, Xavier, Olga and Marc will change the paradigm of protein production by transforming residual biomass into feed,” said Pavel Velkov, managing partner at Morningside Hill Ventures.

“In these challenging times, we believe it is paramount to invest and grow businesses which address some key challenges within our society, namely climate change and food chain sustainability. In addition to its sustainable development impact, the business provides a great investment opportunity.”

Joining Morningside Hill is New Vision 3 (NV3) Fund. A successor of NEVEQ I and NEVEQ II – two venture capital veterans in Bulgaria and the surrounding region – NV3 is based in Sofia and focuses its investments on rapidly-growing tech companies with aspirations to being a leader in their respective field and/or global markets.

As a co-leading investor in NV3, the Fund of Funds has committed EUR 19.1 million (US$21.5 million) to NV3 through the Innovation and Competitiveness 2014-2020 operational program co-financed by the European Structural and Investment Funds. 

The capital from this deal will be used by Nasekomo to strengthen its market presence and increase its productivity through the greater leveraging of robotics and data analytics. The company also will be launching a new selective breeding program for greater efficiency in transforming ag waste into beneficial insect-based products.

“We are delighted to have two Bulgarian investment funds, Morningside Hill Venture and New Vision3, supported by the Fund of Funds in Bulgaria as the leading investor in both funds,” said Nasekomo.

“Several private investors composed of prominent entrepreneurs and business leaders from the UK, France, South Africa and Bulgaria have also joined the round. Nasekomo’s technology will become the global standard. We are already in advanced negotiations with multinationals to roll out jointly-owned units in Europe and Asia which will produce aggregated 100,000 tons of insect protein by 2026.”

– Lynda Kiernan is editor with GAI Media, and is managing editor and daily contributor for Global AgInvesting’s AgInvesting Weekly News and  Agtech Intel News, and HighQuest Group’s Oilseed & Grain News. She is also a contributor to the GAI Gazette. She can be reached at lkiernan@globalaginvesting.com.