Agritech startup FarmInsect has closed a seven-figure seed financing round. In addition to Bayern Kapital and High-Tech Gründerfonds, the investors include experienced business angels from the BayStartUP investors network. With its financing coaching, BayStartUP significantly supported the founding team in its preparation for this second financing round as well.
With the help of the FarmInsect solution, farmers will in future be able to use insects as animal feed for fish, chickens or pigs. With the help of the FarmInsect fattening system, farmers will be able to produce their own protein feeds, thus significantly reducing costs and dependence on imported feeds such as soy.
The core of the FarmInsect solution is the fully automated, modularly expandable fattening plant, which for the first time enables farmers to produce their own protein feed. The plant recycles residual materials from agriculture and the food industry and uses them to fatten the larvae of the black soldier fly. The larvae serve as high-protein animal feed and are expected to replace soy and fish meal with a sustainable and regional alternative. Agricultural businesses or even recycling plant operators can set up the fattening plants decentrally on their premises and expand them on a modular basis as needed.
By feeding organic residues in the fattening plant, the production of insect meal is particularly economical. Farmers thus tap additional value-added potential. They use resources more efficiently, save costs and support the regional circular economy. And last but not least, they can save up to 50% of the CO2 emissions associated with feed production. The fully automated fattening facility is also equipped with an IoT system. It continuously monitors the development of the larvae and supports the farmers in all important steps.
Transition to the growth phase
FarmInsect has been operating its first pilot plant at the Venture Lab of the Technical University of Munich since 2019. Before the end of 2021, FarmInsect will deliver the first series fattening plants to farmers, with many more interested parties to follow in the coming year. To ensure that FarmInsect supplies the plants with young larvae, part of the fresh capital will be used to build a new, state-of-the-art production site in the Munich area.
Thomas Kuehn, founder and managing director of FarmInsect:
BayStartUP's financing coaching helped us a lot to get to know investors and to keep improving ourselves. We were really challenged on topics like our business model and its implementation. This has always pushed us further and led to new ideas. We are well on our way to becoming a true partner for farmers and making agriculture more sustainable.
Dr. Georg Ried, Managing Director of Bayern Kapital:
FarmInsect's automated solution enables farmers to produce protein feeds themselves, thereby reducing the need to import soy or fish meal. This perspective conserves resources, the environment and helps to improve animal health. We therefore see considerable growth potential for FarmInsect.
Dr. Maximilian Bock, Investment Manager at High-Tech Gründerfonds:
Right from the start, the team impressed us with their passion for more sustainability in agriculture. The individual strengths of the trio of founders complement each other ideally. We see the regional and sustainable approach to feed production as an innovative and promising business model with considerable scaling potential.
Market environment with bright prospects
The market for insect proteins is expected to grow many times over by 2030. Currently, more than 90% of protein feeds such as soybean meal or fish meal still have to be imported into the EU for animal breeding. However, these imports cause massive ecological problems such as deforestation of tropical rainforests and overfishing of the oceans. Because of the increasing demand for feed while land and marine resources are being depleted, protein feed prices have increased several times over in the last 10 years alone. For most farms, feed costs account for up to 60% of current costs. Therefore, many farmers are currently looking for alternative, economical and more sustainable solutions for their farms.
The three founders of FarmInsect are all graduates of the Technical University of Munich. They come from different disciplines, yet they are united by their vision of a more sustainable agriculture. Wolfgang Westermeier holds a master's degree in agriculture and has already founded several companies in the food sector. He has experience in production, operations and quality management. Thomas Kuehn is an electrical engineer and economist and has also successfully founded several companies in different sectors. Finally, Andre Klöckner brings several years of experience in product development in the agritech sector as an electrical engineer and computer scientist.