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French startup \u0178nsect<\/a> shot into the spotlight when \u201cIron Man\u201d star Robert Downey Jr. touted its merits<\/a> on the \u201cLate Show\u201d during Super Bowl weekend 2021. Now, nearly four years later, the insect farming company has been placed into judicial liquidation<\/a> \u2014 essentially bankruptcy \u2014 for insolvency.\u00a0<\/p>\n The company\u2019s demise is hardly a surprise, as \u0178nsect had been embattled for months. Still, there is plenty to unpack about how a startup can go bankrupt despite raising over $600 million, including from Downey Jr.\u2019s FootPrint Coalition<\/a>, taxpayers, and many others.<\/p>\n Ultimately, \u0178nsect failed to fulfill its ambition to \u201crevolutionize the food chain\u201d<\/a> with insect-based protein. But don\u2019t be too quick to attribute its failure to the \u201cick\u201d factor that many Westerners feel about bugs. Human food was never its core focus.\u00a0<\/p>\n Instead, \u0178nsect focused on producing insect protein for animal feed and pet food, two markets with very different economics and margins that the company never quite chose between.<\/p>\n That indecision extended to its M&A strategy. In 2021, \u0178nsect acquired Protifarm, a Dutch company raising mealworms for human food applications, adding a third market to the mix. Even as the company announced the deal, then-CEO Antoine Hubert admitted<\/a> it would take a couple of years for human food to represent just 10% to 15% of \u0178nsect\u2019s revenue.\u00a0<\/p>\n \u201cWe still see pet food and fish feed being the largest contributor to our revenues in the coming years,\u201d Hubert declared at the time. In other words, \u0178nsect was acquiring a company in a market segment that would remain marginal for years \u2014 at a time when the startup desperately needed revenue growth.<\/p>\n And revenue was the problem. According to publicly available data, \u0178nsect\u2019s revenue from its main entity peaked<\/a> at \u20ac17.8 million in 2021 (approximately $21 million) \u2014 a figure reportedly inflated by internal transfers<\/a> between subsidiaries. By 2023, the company had racked up a net loss of \u20ac79.7 million ($94 million).<\/p>\n Techcrunch event<\/p>\n \n\t\t\t\t\t\t\t\t\tSan Francisco<\/span> So how did a company with such meager revenue raise over $600 million? The answer wasn\u2019t hype-driven crossover funds paying ambitious multiples during the 2021 funding frenzy. Instead, \u0178nsect attracted impact-focused investors like Astanor Ventures and public investment bank Bpifrance<\/a> that bought into a compelling sustainability vision.<\/p>\n Its pitch to them was simple \u2014 offering an alternative to resource-intensive proteins like fishmeal and soy. That same thesis also attracted significant capital to competitors like Better Origin<\/a> and Innovafeed<\/a>, and it seemed promising.<\/p>\n But the vision collided with market reality. Animal feed is a commodity market driven by price, not sustainability premiums. In a perfect world, insect protein would be fully circular, with insects fed on food waste that would otherwise go to landfill. But in practice, factory-scale insect production typically ends up relying<\/a> on cereal by-products that are already usable as animal feed \u2014 meaning insect protein just adds an expensive extra step. For animal feed, the math simply wasn\u2019t working.<\/p>\n \u0178nsect eventually recognized this. Pet food proved to be a different equation: It is less price-driven than animal feed and a far better market for insect protein, even with competition from other alternative proteins such as lab-grown meat<\/a>. By 2023, the company refocused its strategy<\/a> on pet food and other higher-margin segments, with Hubert citing broader economic pressures.\u00a0<\/p>\n \u201cIn an environment where there is inflation on energy and raw materials but also on the cost of capital and debt, we cannot afford to invest loads of resources in markets which are the least remunerative (animal feed), while you have other markets where there is a lot of demand, good returns and higher margins,\u201d Hubert said at the time.<\/p>\n The 2023 pivot to pet food came too late. By then, \u0178nsect had already committed to a massive, capital-intensive bet that would ultimately doom the company. That bet was \u0178nfarm, a \u201cgiga-factory\u201d in Northern France that the company billed \u201cthe world\u2019s most expensive bug farm<\/a>.\u201d Built for insect production at scale, the facility consumed hundreds of millions in funding \u2014 money spent before \u0178nsect had proven its business model or figured out its unit economics.<\/p>\n To oversee \u0178nfarm\u2019s launch, \u0178nsect brought in Shankar Krishnamoorthy, a former executive at French energy giant Engie. When that move to pet food failed to save the company, Krishnamoorthy replaced Hubert as CEO.<\/p>\n \u0178nsect then shut down the production plant it had acquired from Protifarm and cut jobs. But shuttering one facility while operating a giga-factory built for the wrong market couldn\u2019t solve the fundamental problem.<\/p>\n For Professor Joe Haslam, who teaches a course on Scaling Up in the MBA Program at IE Business School, \u201c\u0178nsect\u2019s struggles are not a mystery and not mainly about insects. They are the result of a mismatch between industrial ambition, capital markets, and timing, compounded by some execution and strategy choices.\u201d<\/p>\n The fact that \u0178nsect failed doesn\u2019t mean the entire insect farming sector is doomed. Competitor Innovafeed is reportedly holding up better<\/a>, in part because it started with a smaller production site and is ramping up<\/a> incrementally.<\/p>\n For Prof. Haslam, \u0178nsect exemplifies a broader European problem. \u201c\u0178nsect is a case study in Europe\u2019s scaling gap. We fund moonshots. We underfund factories. We celebrate pilots. We abandon industrialization. See Northvolt<\/a> [a struggling Swedish battery maker], Volocopter<\/a> [a German air taxi startup], and Lilium<\/a> [a failed German flying taxi company],\u201d he said.<\/p>\n The failure has prompted some soul-searching. Hubert himself co-founded Start Industrie<\/a>, an association advocating for policies to support French industrial startups \u2014 a recognition that Europe needs more than just funding to build the next generation of deep tech companies.<\/p>\n<\/div>\n
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\n\t\t\t\t\t\t\t\t\t\t\t\t\tOctober 13-15, 2026<\/span>\n\t\t\t\t\t\t\t<\/p>\n<\/p><\/div>\n<\/p><\/div>\n<\/div>\n