When it comes to making a good investment, you might look to sink your savings into lucrative technology titans think Facebook, Apple and Microsoft or jump on initial public offerings (IPOs) for high-flying digital disruptors like Uber, Lyft or Airbnb.
Pretty soon, Wall Street might start chasing a different (albeit less sexy) investment opportunity: insect meal manufacturers. In 2020, Rabobank Corporate Investments (RCI) the investment franchise of the Dutch multinational banking and financial services company made an undisclosed investment in Protix, a breeder of black soldier fly (BSF) larvae for sustainable animal feed production. The Netherlands-based company breeds BSF larvae and processes them into meal and oils for fish feed and livestock, and also produces fertilizer from their waste. For investors like RCI, this latest cash injection made good financial sense.
As a large investor in food and agriculture and sustainability propositions, Rabo Corporate Investments is continuously looking for promising companies that offer solutions for today’s challenges, said Arjan van der Hout, associate director at RCI.
In Protix, we see a company that tackles two of the largest issues we face today: How do we sustainably produce enough food for a fast-growing global population and how do we reduce food waste throughout the supply chain? Within a new and pioneering industry, it is key to back the right party. After extensive research into the competitive field, we chose to back Protix which we consider an absolute frontrunner, capable of meeting the challenges of this pioneering industry.
It’s not the first investment that Protix has seen since it was first founded in 2009. In June 2017, the company received 45 million ($50.5 million) in funding from Rabobank, Aqua-Spark and other investors. The RCI investment comes on the heels of the Protix opening the world’s largest insect factory in Bergen op Zoom, in southern Holland, at a cost of 40 million ($45 million).
Protix had met several key milestones most importantly with the successful opening of the world’s first industrial-scale, largely automated production facility for insect ingredients, said van der Hout. We considered it an opportune moment to once again join with an equity investment, this time via Rabobank’s captive investment arm, Rabo Corporate Investments.
Protix announced it March that it intends on using this injection of capital to scale up the production of insects in the Netherlands and expedite its international expansion. It’s a win for the company but also the aquaculture industry as a whole, explains Dr. Kevin Fitzsimmons, Department of Environmental Science at the University of Arizona.
Ramping up production levels and maintaining quality controls in the BSF meal are the last critical steps to widespread adoption of BSF as a key ingredient in aquaculture feeds, said Fitzsimmons. The demand for high-quality protein ingredients is rapidly growing in the aquaculture and poultry industries. Aquaculture in general is willing to pay more for these proteins than the poultry people, and still, virtually every sector of aquaculture identifies high feed costs as a key barrier to further growth. As economies of scale are achieved and costs of BSF meal production are decreased, the potential is virtually unlimited for BSF meal to replace fishmeal and even compete with soy and other plant-based proteins.
With investments made in some in the world’s biggest insect players, investors and scientists are optimistic, believing that BSF meal will soon become a bigger factor in the global aquafeed supply picture.
20162020 Global Aquaculture Alliance