From Super Bowl Spotlight to Courtroom Reality
French startup Ÿnsect once enjoyed rare mainstream attention for an agrifood company. During Super Bowl weekend in 2021, Hollywood actor Robert Downey Jr. praised the company on The Late Show, helping propel it into the global spotlight. Less than four years later, the company has entered judicial liquidation, the French equivalent of bankruptcy, after becoming insolvent.
While the downfall may seem abrupt, the warning signs had been accumulating for months. Ÿnsect’s collapse raises a broader and more uncomfortable question for Europe’s startup ecosystem: how can a company that raised more than $600 million still fail to build a viable business?
A Grand Vision — and a Narrow Path to Revenue
Ÿnsect set out to “revolutionize the food chain” by producing protein from insects. Contrary to common assumptions, its main challenge was not consumer resistance to eating bugs. Human food was never the company’s primary market.
Instead, Ÿnsect focused on animal feed and pet food, two sectors with fundamentally different pricing dynamics and profit margins. Rather than committing decisively to one, the company attempted to pursue both — a strategic ambiguity that would later prove costly.
That lack of focus became even more evident in 2021, when Ÿnsect acquired Protifarm, a Dutch producer of mealworms for human consumption. The move added a third market to an already complex strategy.
At the time, then-CEO Antoine Hubert acknowledged that human food would remain a small part of the business for years.
“We still see pet food and fish feed being the largest contributor to our revenues in the coming years,” Hubert said.
In effect, the company invested in a segment expected to generate just 10% to 15% of revenue after several years, despite urgently needing scale and cash flow.
Strong Funding, Weak Financial Performance
Revenue growth never matched the company’s ambitions. Publicly available figures show that Ÿnsect’s main entity generated €17.8 million in revenue in 2021 (around $21 million), a figure reportedly boosted by internal transactions between subsidiaries. By 2023, losses had ballooned to €79.7 million ($94 million).
Given these numbers, the scale of funding appears striking. Ÿnsect raised more than $600 million, not from speculative growth investors chasing inflated multiples, but from impact-driven backers such as Astanor Ventures, Bpifrance, public funds, and Robert Downey Jr.’s FootPrint Coalition.
The investment thesis was compelling: insect protein could replace environmentally intensive inputs like fishmeal and soy. Similar logic fueled investment across the sector, benefiting peers such as Innovafeed and Better Origin.
When Sustainability Meets Commodity Economics
The problem was not the environmental vision, but the economics of the target market. Animal feed is a commodity business, where price outweighs sustainability considerations.
In theory, insect farming could be circular, with insects fed on food waste otherwise destined for landfill. In practice, large-scale production often relies on cereal by-products that are already suitable for animal feed. That reality turns insect protein into an extra, expensive processing step, rather than a cost-saving solution.
For animal feed, the numbers simply did not add up.
A Late Pivot Toward Higher Margins
Pet food offered a more promising alternative. Unlike animal feed, it is less price-sensitive and can accommodate premium positioning, even amid competition from other alternative proteins.
By 2023, Ÿnsect officially shifted its focus toward pet food and other higher-margin markets. Hubert framed the decision as a response to macroeconomic pressure:
“In 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.”
The strategic reset, however, came too late.
The Giga-Factory That Sealed Ÿnsect’s Fate
Long before its pivot, Ÿnsect had committed to its most ambitious — and expensive — project: Ÿnfarm, a massive insect-production facility in northern France. Promoted as a breakthrough industrial site and widely described as “the world’s most expensive bug farm,” the factory absorbed hundreds of millions of euros in capital.
Crucially, this investment was made before the company had validated its unit economics or finalized a sustainable market focus.
To manage the launch, Ÿnsect recruited Shankar Krishnamoorthy, formerly of French energy group Engie. When the pet food strategy failed to stabilize the business, Krishnamoorthy replaced Hubert as CEO.
Cost-cutting followed. Ÿnsect shut down the Protifarm facility and reduced headcount. But closing one plant while operating a capital-intensive giga-factory designed for the wrong market could not resolve the underlying structural issues.
A Case Study in Europe’s Scaling Problem
For Professor Joe Haslam, who teaches Scaling Up in the MBA program at IE Business School, the outcome was predictable:
“Ÿnsect’s 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.”
Importantly, Ÿnsect’s failure does not invalidate the entire insect-protein sector. Competitor Innovafeed is reportedly performing more robustly, in part because it began with smaller-scale production and expanded gradually.
Haslam argues that the deeper lesson is systemic.
“Ÿnsect is a case study in Europe’s scaling gap. We fund moonshots. We underfund factories. We celebrate pilots. We abandon industrialization. See Northvolt, Volocopter, and Lilium.”
Lessons After the Fall
The collapse has sparked reflection within the ecosystem. Antoine Hubert has since co-founded Start Industrie, an association pushing for stronger policy support for French industrial startups — a recognition that capital alone is not enough to turn deep-tech ambition into industrial success.
Ÿnsect’s story is ultimately less about insects and more about strategy, sequencing, and scale. For Europe’s next generation of climate and industrial startups, it offers a costly but valuable lesson.
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