Singapore-based alternative protein company INSEACT has raised $1.3 million in a seed funding round led by a European family office.
While the name of the European family office could not be ascertained, it has injected a total of $500,000 in the current round, the startup’s co-founders told DealStreetAsia.
Other investors who participated in the round are ADB Ventures, venture capital firm Loyal VC, INSEAD Asia Angels Club, as well as private investors such as INSEAD Business School’s Private Equity professor Claudia Zeisberger, and co-founder of Europe-based Standard Investment Idgar Kippersluis, besides a world-leading shrimp producer, said the co-founders.
INSEACT declined to reveal their respective investment amounts.
The fresh funding will be used by INSEACT to spruce up its R&D site in Singapore and ramp up headcount, as it looks to begin delivering products to INSEACT’s clients which include large and small fish and shrimp farms across Southeast Asia.
The startup also plans to use a significant part of the capital to build a black soldier flies’ (BSFs) pilot production in the city-state.
Sustainable fish feed
Founded in 2019 by two former INSEAD students, the company specialises in producing sustainable insect protein from black soldier flies, which is then used as fish feed.
Overfishing is a growing threat to the world’s marine life and fishing communities. Each year, a large portion of the wild fish caught are used for the fish feed industry — it takes several kilos of anchovies to grow just one salmon.
Tim van Vliet and Michael Badeski say they saw an opportunity to produce a more cost-competitive, healthier, and environmentally sustainable fish feed from insects feeding on bio-waste.
INSEACT claims to use the waste from palm oil operations as a raw material to feed the insects. The insect protein is then used as a feedstock for farmed fish and shrimp, that in turn reduces the reliance on wild-caught fish as the main protein ingredient in aquaculture feed.
“Sustainable insect-derived products are the key to solving a wide range of environmental problems. Fish stocks are being overfished and fish feed production has actually stopped increasing, even though agriculture is still increasing their production. This drives prices upwards. Regular fish feed can constitute up to 60% of a farmer’s operating costs,” said van Vliet, co-founder and CEO at INSEACT, in a video interview with DealStreetAsia.
“BSFs eat and grow faster than crickets or mealworms (main producers of insect protein) do, and are the most flexible type of insect in terms of the type of feedstock you can feed them, such as waste products. That really builds a circular economy a lot more as opposed to using other agri byproducts that are not truly waste products. They have a market value and you have to purchase them. As a result, that presents a much less scalable opportunity,” said Badeski, co-founder and COO of INSEACT.
“On top of that, BSFs are endemic to the region we are in, so the environmental conditions are already right,” added van Vliet.
INSEACT won the INSEAD Venture Competition and a €40,000 (approximately $63,000) grant. Its total funding stands at around $1.36 million to date.
Plans to close Series A round in Q1 2022
The startup is currently working with different shrimp farmers in Southeast Asia to test out its products, such as international fish and shrimp farming business Lim Shrimp Organization which runs several shrimp farms in the region.
“Alternative proteins will play a critical role in addressing Asia’s growing need for sustainable and affordable food supply,” said Kean Ng at ADB Ventures. The Asian market is home to almost the entire global production of farmed seafood.
“Our customers are seeing conclusive evidence of shrimp growth benefits from our protein products, leading to significant cost savings and reduced feed consumption,” van Vliet added. INSEACT says it plans to close its Series A round in Q1 2022, even as it declined to reveal how much it is raising.
Using insect protein from BSFs as fish feed is not a new concept in other regions and countries such as Africa, Mexico and Europe. In fact, Europe is most advanced when it comes to insect protein companies.
The global black soldier fly market is expected to reach $3.4 billion by 2030, at a CAGR of 34.7% during the forecast period of 2020 to 2030, according to a report by ResearchAndMarkets.com.
Last July, Singapore-based insect farming startup Protenga closed $1.6 million in a seed funding round from UK agritech company Roslin Technologies and SEEDS Capital while Sirius Venture Capital, a Singapore-based food tech and logistics-focused venture capital firm, co-anchored a $3 million funding round in Hargol FoodTech, an Israel-based startup that produces alternative protein sourced from grasshoppers.
According to Market Watch, the global insect protein market value will increase from $83 million in 2019 to $385.6 million by the end of 2026, growing at a CAGR of 24.3% during 2021-2026.