French insect farming startup Ynsect has been placed into judicial liquidation after failing to overcome persistent revenue shortfalls and high capital costs, bringing an end to a company that raised more than $600 million to build insect-based protein at industrial scale.
From High-Profile Backing To Insolvency
Ynsect gained international attention in early 2021 when actor Robert Downey Jr. highlighted the company on U.S. television during Super Bowl weekend. Nearly four years later, the Paris-based company has entered judicial liquidation, the French equivalent of bankruptcy, after becoming insolvent.
The outcome follows months of financial strain. Despite raising more than $600 million from a mix of private investors, public funds, and impact-focused backers, Ynsect was unable to sustain its operations. Its investors included Downey Jr.’s FootPrint Coalition, French public investment bank Bpifrance, and venture firm Astanor Ventures.
Unclear Market Focus And Limited Revenue
Ynsect set out to produce insect protein as an alternative to resource-intensive inputs such as fishmeal and soy. Human food, often cited by critics as a potential barrier due to consumer aversion, was never the company’s primary focus.
Instead, Ynsect targeted animal feed and pet food, two markets with different pricing dynamics and margins. The company struggled to commit fully to either. That ambiguity deepened in 2021 when Ynsect acquired Protifarm, a Dutch mealworm producer focused on human food applications. At the time, then-chief executive Antoine Hubert said human food would represent only 10% to 15% of revenue after several years, while pet food and fish feed would remain the main contributors.
Publicly available figures show Ynsect’s core entity generated peak revenue of €17.8 million in 2021, about $21 million, a number later reported to include internal transfers between subsidiaries. By 2023, the company recorded a net loss of €79.7 million, or roughly $94 million.
Impact Investors And Commodity Market Reality
Ynsect’s fundraising success was driven largely by investors aligned with sustainability goals rather than short-term returns. The company’s pitch centered on reducing environmental pressure from conventional protein sources, a thesis that also drew capital to peers such as Innovafeed and Better Origin.
However, animal feed operates as a commodity market where price dominates purchasing decisions. While insect farming is often framed as circular, large-scale production typically relies on cereal by-products already suitable for animal feed. That structure added cost rather than replacing an existing input, making insect protein difficult to price competitively for feed.
Late Shift Toward Pet Food
Pet food offered better margins and less price sensitivity, and by 2023 Ynsect began shifting its strategy toward that segment and other higher-margin uses. Hubert cited rising energy prices, raw material costs, and higher capital costs as reasons for pulling back from lower-margin animal feed markets.
The shift came after Ynsect had already committed to a major industrial investment that defined its fate.
Capital-Intensive Bet On YnFarm
Central to Ynsect’s collapse was YnFarm, a large-scale production facility in northern France promoted as the world’s most advanced insect farming plant. The facility consumed hundreds of millions of euros and was built before the company had demonstrated viable unit economics or stable demand at scale.
To oversee YnFarm’s rollout, Ynsect hired Shankar Krishnamoorthy, formerly of Engie. When the pivot to pet food failed to stabilize the business, Krishnamoorthy replaced Hubert as chief executive.
Ynsect later shut down the Protifarm facility and cut staff, but operating a capital-heavy factory designed for a different market left little room to adjust.
Liquidation And Industry Implications
Following the liquidation decision, Ynsect’s final chief executive, turnaround specialist Emmanuel Pinto, said the company’s remaining assets are available for sale. In a statement cited by French media, he said the technical expertise and commercial relationships developed by the team could still contribute to Europe’s protein supply and climate goals.
Professor Joe Haslam of IE Business School said Ynsect’s failure stemmed from a mismatch between industrial ambition, capital markets, timing, and execution, rather than from insect farming itself. He noted that competitors such as Innovafeed have taken a more incremental approach to scaling.
Haslam described Ynsect as an example of a broader European challenge, where early-stage innovation is funded but industrial scale-up struggles to sustain long-term support.
The company’s former chief executive has since co-founded Start Industrie, an association advocating for policies to better support industrial startups in France.
Featured image credits: U.S. Department of Agriculture via rawpixel
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