French insect meal startup NextProtein got a boost to its expansion plans after gaining access to €10.2 million ($11.3 million) in Series A funding.
The firm produces black soldier fly larvae to convert food waste into animal feed at its facility in Tunisia.
The first step of its expansion plan is extending the facility from 3,000 square meters to 10,000 square meters, followed by a new facility in a new country. The company declined to disclose where the facility will be located, but hinted at Asia or Latin America.
Despite securing orders with the pet food industry so far, the company is well ahead in addressing the aquaculture feed giants with its product, Co-Founder Mohamed Gastli told IntraFish.
"We have been in close talks with the aquafeed giants for many years now, but they only started the switch to insect meal six to 12 months ago when they started seeing that production is increasing among the insect actors," Gastli said.
According to Gastli, fishmeal can be fully replaced with insect meal with the addition of fish oil due to the lack of omega-3s in insect meal. However, the main concerns of aquafeed giants are price and quantity.
NextProtein plans to scale its production to 100,000 metric tons per year by 2025 -- an estimated 10 percent of the total insect protein market globally.
The company's price model is linked to access to feed stock, energy and production costs.
"We know in order to enter the commodity space, the target price is fishmeal," Gastli said.
"We don't know now if insect meal is priced higher than fishmeal but we are working on proposing our product at a premium because of sustainability."
Insect meal is new to the commodity space so the focus is on being more cost efficient than fishmeal.
The company is currently one of the few with operations outside the European Union to have its products certified through the region’s Trade Control and Expert System (TRACES), the strictest standards in the world for overseeing the import of animal products within its borders.
The latest funding round was led by a group of investors coordinated by Blue Oceans Partners, including Telos Impact and RAISE Impact, with support from Mirova, an affiliate of Natixis Investment Managers, through the Althelia Sustainable Ocean Fund, Kepple Africa Ventures and Aucfan Incubate Inc.