Ÿnsect is dead, long live insects

Published on December 9, 2025

It was a long and painful process to watch, but finally, Ÿnsect, the former French insect protein unicorn, is “dead”. I say painful because it led to many exaggerations, initially positive ones that have become increasingly pessimistic about the company itself, the underlying trend and technology, AgriFoodTech, and startup-driven innovation as a whole. I have never been a great believer in insects as a miracle solution, but they are a piece of the future of food. If it’s over with Ÿnsect, it’s far from being the case for insects. Let’s look at what this example can help us learn about innovation.

Ÿnsect: the end of a symbol, not a sector – what happened?

Ÿnsect was the symbol of its category (insect farming) and also the linchpin of the French and European AgTech ecosystem. As is often the case, the failure of a flagship startup has ripple effects, affecting companies and technologies that have nothing to do with it. What everybody wonders about is what happened inside a startup that raised almost $600M.

This is not the place for a fully detailed story of the company, but here are three items which can help you understand what happened:

Scaling too soon. Initially, Ÿnsect had an experimental farm, which it was running in the East of France, with plans to then scale up. Then came the post-COVID boom, where most investors were hyped about funding growth. Insect farming was another thing, like vertical farming (remember Infarm), which had proved neither their technology nor their economic viability. Ÿnsect, as the most well-known startup (and with the most efficient founder at marketing its startup promise to revolutionise how things are done) raised the most. As could be expected, scaling up production also implies huge CAPEX and rising fixed costs.
Limited buyers for a high-end product: the company never achieved any significant sales (about €2M in total between 2015 and 2023), mostly coming from its pilot plant. The economics remain complicated, as insect protein is a premium product compared to other feed aliments. It can be partially compensated for by the use of frass (excreta of insects) as agricultural inputs.
Change of mood: investors basically turned away from CAPEX-intensive projects in 2023, and the (massive) use of public funds for Ÿnsect has not been enough. The absence of corporate backers (which are supporting competitors) has not helped.
A wrong set of hypotheses. Many hypotheses were formulated by investors to support their thesis, but most, if not all, went wrong: energy prices went up instead of going down, the facility wasn’t working as planned, the push for strategic autonomy in animal feed was compensated by the inflation concerns on prices. So many things should have been aligned for things to work well that it almost looks like wishful thinking.

The heavy investment of public funds and public figures in this story has also contributed to the current situation. Transforming a single startup into a leader was taking the risk of both selecting the wrong company (notably by making other investors wary of betting against the one so visibly publicly supported) and weakening the overall innovation ecosystem.

insects

Capital is still flowing into insect protein

So, is it over for insect protein? Actually, far from it, it is only the beginning. The issue with failed startups in that space mostly lies in their inability to provide ingredients in the right quantity and at the right price.

After a wave of bankruptcies, we have observed in the past year, quite the opposite, with more than $120M raised, notably:

As these deals demonstrate, the appetite for insect protein and its many applications in agriculture is far from having been squashed by Ÿnsect’s story. Among others, here are some differences between these projects and the previous ones (including Ÿnsect):

Realistic value proposition vs. changing the world: new projects emphasise their multiple markets (protein, fertiliser) but don’t mention fantasies like using insects for human food (which are good to grab the attention of the press and investors, but not to run a business).
Regional production hubs rather than mega facilities: new facilities are focused on their home markets and targeting local consumption rather than planning to become big exporters.

Insects for animal feed and agricultural inputs still make a lot of sense, notably in Europe, where there is a significant protein deficiency in animal feed (combined with a growing push for circularity and a will to become more strategically autonomous, notably from US imports). However, they will probably remain niche as price will remain a concern, and as they have probably missed their “window of opportunity” in terms of timing compared to other technologies.

What this tells us about the AgriFoodTech innovation cycle

insects-DigitalFoodLab-trend-curve

This innovation trend follows a typical pattern along the innovation curve (see the full report on all the trends here for comparison) and is actually closer to becoming productive than to disappearing. It is helpful to remind ourselves of the journey it followed to understand where we are:

After a decade of “incubation” with many attempts and failures in the 2010s, we reached a peak of excitement (around 2020-2022) where tens of players emerged. As the ecosystem was unstructured, each player was trying to master all the segments of the value chain from breeding to industrialisation to commercialisation.
It jumped quite fast into a phase of disillusion (where, again, quite typically, former supporters discovered that the business model, the market and the technology were as ready as they thought), in which we have been for the past three years, with many startups going bankrupt.
Now, as in most cases, survivors are resetting on a more realistic approach and are competing with newly established players which are focused on a single segment (such as FreezeM on insect breeding).

This moment, when new, more focused players re-emerge, often signals that the trend is ready to “restart” its journey towards market adoption.

Beyond, it teaches us some lessons, which are especially valid for large corporations involved in that space, which can be summed up as a list of things to avoid:

Don’t bet on a single technology to solve a problem: for alternative proteins, for example, in most instances, we don’t know which technology will solve which problem
Don’t bet on a single startup: too many bad things can happen
Don’t avoid the hard question: what happens if the underlying partnership hypothesis doesn’t work (if energy prices go up rather than down, if the scale-up process is a failure…)