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.

About FarmIn­sect

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.

About Sand­wa­ter

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.
sandwater.com/

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.
bayernkapital.de

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.
eic.ec.europa.eu/eic-fund/

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.