Surprisingly Large Sums Have Gone Into Bug Farming Startups

Eat more bugs.

That is the last thing on most of our to-do lists. Startup investors, however, seem to think otherwise.

At least that’s the impression one gets looking at insect cultivation-related funding over the past couple years. Venture capitalists have poured hundreds of millions into upstarts aimed at getting livestock, pets, and even people, to consume more bug products.

Examples abound. InnovaFeed, a French biotech developing insect-based protein for the agriculture and aquaculture industries, landed a $250 million Series D just last year. Ynsect, a mealworm cultivator, picked up $170 million in April. And Protix, a Dutch supplier of insect ingredients for humans and animals, has scooped up nearly $120 million to date.

For a bigger-picture look, we used Crunchbase data to assemble a list of 31 companies tied to insect cultivation that were funded in roughly the last two years:

The $1.3B bet on bugs

Collectively, the companies on our list have raised more than $1.3 billion in funding to date. Of that, more than half has come in the past couple of years.

It’s a surprisingly large sum considering that bug cultivation isn’t a particularly buzzy area in the startup scene. While Silicon Valley AI conferences seem to happen every other day, you’d be hard pressed to find a forum for founders pitching the latest mealworm snacks or eco-friendly uses of bug farm waste.

The largesse seems a bit more explicable if one adds insect cultivation to the much broader alternative protein category. Researchers have found that some insects can provide more protein than even meat and chicken eggs. Cricket bars are already marketed to humans as a high-protein snack choice. For industrial feed production, meanwhile, favored bug sources include black soldier flies, larvae, yellow mealworms, silkworms, grasshoppers and termites.

Fish like bugs too, and several companies on our list above are targeting fish farming. Pets are a target market as well for at least two of our featured companies: Petgood, a Swedish maker of insect-based pet foods, and Tuggs, a British startup specializing in insect-derived dog foods.

The eco angle

Several startups, including the most heavily funded, make the case that bug-derived foods represent a more eco-friendly approach to meeting protein demand.

Ynsect proudly touts, for instance, that one kilo of mealworm protein uses 40x less water than one kilo of pork. It also produces a small fraction of the CO2 emissions of cattle farming, while requiring 30x less land, according to the startup.

Innovafeed, meanwhile, talks up its zero-waste approach. All parts of an insect are used, it says, including insect oil for poultry and swine nutrition, insect protein for aquaculture nutrition, and frass (insect manure) as an organic fertilizer.

Protix, for its part, focuses on insects’ ability to consume food sources that might otherwise be discarded, noting that: “Insects have the amazing ability to turn low-grade food waste into valuable high-end proteins and fats.”

Compassion and the yuck factor

Of course, just because something is high in protein doesn’t mean we should want to consume it. When it comes to insect cultivation in particular, opponents point to several factors that should pose a turn-off.

The animal rights group PETA argues that “while insects may be small and look strange to us, that doesn’t mean that their lives don’t matter or that they don’t want to enjoy them.” It notes that bugs are also conscious beings, sometimes capable of complex tasks and able to partake in sophisticated social hierarchies.

Beyond the ethical considerations, there’s also the yuck factor. While it may be amusing to peruse a recipe for, say, mealworm risotto, actually preparing and eating it is another matter entirely.

It is in dining situations like this where PETA’s proposed solution — going vegan — has its strongest appeal. If asked to choose between the vegan meal or the one with mealworms, my guess is the overwhelming majority of us would pick the former.