South African based Inseco announced that it has raised $5.3 million in a seed funding round led by Futuregrowth Asset Management with participation from E4E Africa, and Oak Drive Ventures.
Inseco intends to increase its manufacturing capacity and fund ongoing research and development with this new investment. It also has plans to expand into the rest of Africa, Europe and the US.
Inseco operates the biggest insect protein plant in the southern hemisphere. It is a 10 000 square metre (108 000 square foot) plant based in Cape Town that converts the larvae, known as maggots, of the black soldier fly into 100 tons of insect oil and meal a month. Insect products are high in nutrients and, because the process sees the maggots fed with waste, is seen as a climate-friendly way of feeding farmed fish, poultry and pets.
Fly eggs are produced at Inseco’s plant and then transported to where the waste is produced, either as a by product of a food-manufacturing process or so-called canteen waste, from restaurants.
“We are finding a new home for food products that would have been otherwise destined for landfill,” Simon Hazell, Inseco’s chief executive officer, said in an interview.
The meal is used to feed poultry and fish as a supplement to fishmeal, made from small fish netted in the sea, cutting down on its use, Hazell said. The use of insect protein boosts growth and it also has immune system boosting properties, Hazell said.
According to the United Nations Food and Agriculture Organisation, up to 35% of the food produced globally is wasted. This places a significant cost on economies and environments. In the South African context, the waste that ends up in landfills results in the production of carbon dioxide and methane gas. In addition, the global population is projected to grow substantially by 2050 and current food production systems will be unable to meet the growing demand.
Simon Hazell, Inseco’s CEO, identified insect farming as the perfect solution to these challenges and co-founded the company in 2017. “Now, more than ever, we’re seeing the importance of sustainability – and the responsibility that we have, to be a more resource-efficient society for future generations. At Inseco, we believe that insects will play an important role in this transition, becoming a widely available source of sustainable protein, and an important form of nutrition to help meet the food demands of the future.”
Amrish Narrandes, Head of Unlisted Equity at Futuregrowth, notes: “The investment into Inseco fits well within our responsible investment philosophy. In comparison to traditional protein sources, insect protein has an inherently lower environmental impact, as the process directly reduces food waste, involves minimal greenhouse gas emissions, limited water usage and makes zero use of arable lands. In addition to the strong ESG case, insect protein has a superior nutritional content, which results in higher feed conversion rates compared to traditional protein sources.”
