https://techcrunch.com/2025/12/26/how-reality-crushed-ynsect-the-french-startup-that-had-raised-over-600m-for-insect-farming/ [tc-lockup] TechCrunch Desktop Logo [tc-lo] TechCrunch Mobile Logo * Latest * Startups * Venture * Apple * Security * AI * Apps * Events * Podcasts * Newsletters Search [ ]Submit * Site Search Toggle Mega Menu Toggle Topics Latest AI Amazon Apps Biotech & Health Climate Cloud Computing Commerce Crypto Enterprise EVs Fintech Fundraising Gadgets Gaming Google Government & Policy Hardware Instagram Layoffs Media & Entertainment Meta Microsoft Privacy Robotics Security Social Space Startups TikTok Transportation Venture More from TechCrunch Staff Events Startup Battlefield StrictlyVC Newsletters Podcasts Videos Partner Content TechCrunch Brand Studio Crunchboard Contact Us "Ynsect We Trust"Image Credits:Ynsect Startups How reality crushed Ynsect, the French startup that had raised over $600M for insect farming Anna Heim 2:52 PM PST * December 26, 2025 French startup Ynsect shot into the spotlight when "Iron Man" star Robert Downey Jr. touted its merits on the "Late Show" during Super Bowl weekend 2021. Now, nearly four years later, the insect farming company has been placed into judicial liquidation -- essentially bankruptcy -- for insolvency. The company's demise is hardly a surprise, as Ynsect had been embattled for months. Still, there is plenty to unpack about how a startup can go bankrupt despite raising over $600 million, including from Downey Jr.'s FootPrint Coalition, taxpayers, and many others. Ultimately, Ynsect failed to fulfill its ambition to "revolutionize the food chain" with insect-based protein. But don't be too quick to attribute its failure to the "ick" factor that many Westerners feel about bugs. Human food was never its core focus. Instead, Ynsect focused on producing insect protein for animal feed and pet food, two markets with very different economics and margins that the company never quite chose between. That indecision extended to its M&A strategy. In 2021, Ynsect acquired Protifarm, a Dutch company raising mealworms for human food applications, adding a third market to the mix. Even as the company announced the deal, then-CEO Antoine Hubert admitted it would take a couple of years for human food to represent just 10% to 15% of Ynsect's revenue. "We still see pet food and fish feed being the largest contributor to our revenues in the coming years," Hubert declared at the time. In other words, Ynsect was acquiring a company in a market segment that would remain marginal for years -- at a time when the startup desperately needed revenue growth. And revenue was the problem. According to publicly available data, Ynsect's revenue from its main entity peaked at EUR17.8 million in 2021 (approximately $21 million) -- a figure reportedly inflated by internal transfers between subsidiaries. By 2023, the company had racked up a net loss of EUR79.7 million ($94 million). 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San Francisco | October 13-15, 2026 WAITLIST NOW So how did a company with such meager revenue raise over $600 million? The answer wasn't hype-driven crossover funds paying ambitious multiples during the 2021 funding frenzy. Instead, Ynsect attracted impact-focused investors like Astanor Ventures and public investment bank Bpifrance that bought into a compelling sustainability vision. Its pitch to them was simple -- offering an alternative to resource-intensive proteins like fishmeal and soy. That same thesis also attracted significant capital to competitors like Better Origin and Innovafeed, and it seemed promising. But the vision collided with market reality. Animal feed is a commodity market driven by price, not sustainability premiums. In a perfect world, insect protein would be fully circular, with insects fed on food waste that would otherwise go to landfill. But in practice, factory-scale insect production typically ends up relying on cereal by-products that are already usable as animal feed -- meaning insect protein just adds an expensive extra step. For animal feed, the math simply wasn't working. Ynsect eventually recognized this. Pet food proved to be a different equation: It is less price-driven than animal feed and a far better market for insect protein, even with competition from other alternative proteins such as lab-grown meat. By 2023, the company refocused its strategy on pet food and other higher-margin segments, with Hubert citing broader economic pressures. "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," Hubert said at the time. The 2023 pivot to pet food came too late. By then, Ynsect had already committed to a massive, capital-intensive bet that would ultimately doom the company. That bet was Ynfarm, a "giga-factory" in Northern France that the company billed "the world's most expensive bug farm." Built for insect production at scale, the facility consumed hundreds of millions in funding -- money spent before Ynsect had proven its business model or figured out its unit economics. To oversee Ynfarm's launch, Ynsect brought in Shankar Krishnamoorthy, a former executive at French energy giant Engie. When that move to pet food failed to save the company, Krishnamoorthy replaced Hubert as CEO. Ynsect then shut down the production plant it had acquired from Protifarm and cut jobs. But shuttering one facility while operating a giga-factory built for the wrong market couldn't solve the fundamental problem. The company ultimately failed, and in a statement following the liquidation announcement just weeks ago, its newest and last CEO, a turnaround specialist named Emmanuel Pinto, said its remaining assets are now up for grabs. "We hope that the extensive technical and industrial expertise developed by the Ynsect teams, as well as the commercial relationships they have established, will be put to productive use and make a valuable contribution both to Europe's protein independence and to the fight against climate change," he wrote in a statement quoted by French media. For Professor Joe Haslam, who teaches a course on Scaling Up in the MBA Program at IE Business School, "Ynsect'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." The fact that Ynsect failed doesn't mean the entire insect farming sector is doomed. Competitor Innovafeed is reportedly holding up better, in part because it started with a smaller production site and is ramping up incrementally. For Prof. Haslam, Ynsect exemplifies a broader European problem. "Ynsect is a case study in Europe's scaling gap. We fund moonshots. We underfund factories. We celebrate pilots. We abandon industrialization. See Northvolt [a struggling Swedish battery maker], Volocopter [a German air taxi startup], and Lilium [a failed German flying taxi company]," he said. The failure has prompted some soul-searching. Hubert himself co-founded Start Industrie, an association advocating for policies to support French industrial startups -- a recognition that Europe needs more than just funding to build the next generation of deep tech companies. Topics alternative proteins, Europe, foodtech, France, insect farming, manufacturing, post-mortem, Startups, Sustainable tech, Ynsect Anna Heim Anna Heim Freelance Reporter Anna Heim is a writer and editorial consultant. You can contact or verify outreach from Anna by emailing annatechcrunch [at] gmail.com. As a freelance reporter at TechCrunch since 2021, she has covered a large range of startup-related topics including AI, fintech & insurtech, SaaS & pricing, and global venture capital trends. As of May 2025, her reporting for TechCrunch focuses on Europe's most interesting startup stories. Anna has moderated panels and conducted onstage interviews at industry events of all sizes, including major tech conferences such as TechCrunch Disrupt, 4YFN, South Summit, TNW Conference, VivaTech, and many more. A former LATAM & Media Editor at The Next Web, startup founder and Sciences Po Paris alum, she's fluent in multiple languages, including French, English, Spanish and Brazilian Portuguese. View Bio Event Logo Dates TBD Locations TBA Plan ahead for the 2026 StrictlyVC events. Hear straight-from-the-source candid insights in on-stage fireside sessions and meet the builders and backers shaping the industry. Join the waitlist to get first access to the lowest-priced tickets and important updates. Waitlist Now Most Popular * The phone is dead. Long live . . . what exactly? + Connie Loizos * Meta just bought Manus, an AI startup everyone has been talking about + Connie Loizos * You've been targeted by government spyware. 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