Inseco, which operates the biggest insect protein plant in the southern hemisphere, said it raised $5.3 million in South Africa’s biggest ever startup seed funding round.
Futuregrowth Asset Management contributed alongside E4E Africa and Oak Drive Ventures, Inseco said in a statement sent to Bloomberg on Thursday.
Inseco operates a 10 000 square metre (108 000 square foot) plant 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. While the latter can be used in South Africa, laws in the European Union do not permit its use to create feed for poultry and aquaculture. Inseco plans to start exports to the EU and the U.S. in the second quarter.
“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.
Futuregrowth, South Africa’s biggest specialist fixed-income investor, has invested in a number of startups including SweepSouth, Africa’s largest online home-services platform.
Inseco competes globally with enterprises such as the Netherlands’ Protix BV, France’s Ynsect SAS and Innova Feed, Canada’s Enterra Feed Corp and US company EnviroFlight.
The company is targeting what it sees as a 500 000 ton market for insect protein by 2030 and a global pet food market worth $38 billion.