French agtech startup Ÿnsect once stood as one of Europe’s most ambitious sustainability stories. Back in early 2021, the company found itself in the global spotlight after actor Robert Downey Jr. praised its mission on a late night television appearance during Super Bowl weekend. At the time, the idea of producing insect-based protein at industrial scale seemed like a bold answer to food security and climate challenges.
Nearly four years later, that vision has unraveled. Ÿnsect has been placed into judicial liquidation in France, a legal process comparable to bankruptcy, after running out of cash. The collapse has raised uncomfortable questions about how a company that attracted more than $600 million in funding from impact investors, public institutions, and high-profile backers ultimately failed to build a sustainable business.
The downfall did not come out of nowhere. For months before the liquidation, Ÿnsect had been under financial pressure, cutting costs, revising strategy, and searching for additional capital. Still, the scale of the funding it raised makes the outcome difficult to ignore. Investors included Downey Jr.’s FootPrint Coalition, French public investment bank Bpifrance, and sustainability-focused venture firms that believed insect protein could replace resource-heavy alternatives such as soy and fishmeal.
The company’s original pitch centered on transforming the food system with insect-based protein. However, human consumption was never meant to be the main revenue driver. From the start, Ÿnsect focused primarily on animal feed and pet food, two markets that operate under very different economic realities. Instead of committing fully to one path, the startup attempted to serve both, a decision that would later complicate its growth.
That lack of focus extended to acquisitions. In 2021, Ÿnsect purchased Protifarm, a Dutch company specializing in mealworms for human food products. At the time, then CEO Antoine Hubert acknowledged in an interview reported by AgFunderNews that food for humans would represent only a small fraction of revenue for several years. Despite this, the acquisition added another market to an already complex strategy, at a moment when the company urgently needed predictable income.
Revenue never matched the scale of ambition. Public financial filings show that Ÿnsect’s main operating entity reached peak revenue of about €17.8 million in 2021, a figure later questioned by analysts due to internal transactions between subsidiaries. By 2023, losses had widened dramatically, with net losses nearing €80 million, according to French corporate registry data.
The question then becomes how such modest revenue supported one of Europe’s largest funding rounds in agritech. Unlike many startups fueled by short-lived hype during the 2021 venture capital boom, Ÿnsect appealed to long-term, impact-driven investors. Its promise of reducing environmental damage from traditional protein sources resonated strongly with public funds and sustainability-focused capital.
Similar arguments helped competitors such as Innovafeed and Better Origin raise significant financing. On paper, the sector appeared well positioned. In practice, the economics proved far more challenging. Animal feed is a commodity business, where pricing matters more than environmental credentials. While the ideal vision involved feeding insects with food waste, large-scale operations often relied on agricultural by-products that were already suitable for animal feed, adding cost without clear economic benefit.
As academic research published in journals like ScienceDirect has shown, insect protein can struggle to compete on price when scaled industrially. For Ÿnsect, this meant the math behind animal feed never fully worked. Pet food offered better margins and less price sensitivity, but by the time the company pivoted toward that segment in 2023, structural decisions had already locked it into an unsustainable cost base.
The most consequential of those decisions was the construction of Ÿnfarm, a massive production facility in northern France. Marketed as the world’s largest and most advanced insect farm, the site consumed hundreds of millions of euros in capital before the company had validated its unit economics. Tech industry observers, including coverage in Reuters, later pointed to the factory as a turning point that amplified financial risk.
To manage the facility’s launch, Ÿnsect brought in Shankar Krishnamoorthy, a former executive at energy company Engie. When the strategic shift toward pet food failed to stabilize the business, Krishnamoorthy replaced Hubert as CEO. Cost-cutting followed, including the shutdown of the Protifarm facility and job reductions, but the fixed costs associated with Ÿnfarm remained.
Operating a giga-scale factory designed for one market while trying to reposition toward another left little room for recovery. When liquidity ran out, a court-appointed process began. In a statement reported by French media, the company’s final CEO, turnaround specialist Emmanuel Pinto, said remaining assets would be offered for sale, expressing hope that the technical expertise developed by the team could still contribute to Europe’s protein independence and climate goals.
Business school professor Joe Haslam of IE Business School described the case as less about insects and more about timing, capital allocation, and execution. In his view, the company suffered from a mismatch between industrial ambition and market readiness, combined with strategic decisions that compounded risk.
The failure of Ÿnsect does not mean the insect farming sector is finished. Competitors such as Innovafeed appear to be faring better by scaling production gradually and aligning capacity more closely with demand, according to reporting from European outlets like Courrier Picard and Les Echos.
For some observers, the story also reflects a broader challenge within European deep tech. High-profile setbacks at companies like Northvolt, Volocopter, and Lilium have fueled debate over whether Europe excels at funding bold ideas but struggles to support the long, capital-intensive process of industrialization.
Even Ÿnsect’s former leadership has acknowledged the lesson. Antoine Hubert has since co-founded Start Industrie, an advocacy group pushing for policy reforms to better support industrial startups in France. The move suggests that while the company’s journey has ended, the conversation it sparked around scaling sustainable manufacturing in Europe is far from over.
