The identity of the investors behind the €1m funding will be announced in the coming week, said co-founder and CEO Alvan Hunt.
Hunt, along wtih John Lynam and Patrick McGarvey - all aged 26 - came together at university with the shared ambition of “doing something innovative in agtech."
“We knew that there were problems down the line with the food supply chain and could see there was little going in feed innovation to address this,” said Hunt.
After two years of experimenting in synthetic biology, they “cracked” insect breeding, and raised a first round of venture capitalist funding to the tune of €100,000 through IndieBio’s (now RebelBio) EU accelerator programme. They used this to finance a 3,000 sq ft (278 sq m) pilot plant in Co Meath, which enabled them to develop the process and produce samples of insect oil, protein, chitin and fertilizer.
Now, the biotech start-up is gearing up for the next phase of growth, which will see the opening of a 25,000 sq ft facility this summer.
“This will give us the capacity to produce 1.5 tons of protein in 32 sq ft every three weeks year-round. The output-to-footprint ratio is pretty revolutionary,” Hunt told FeedNavigator.
Interest in insect protein as a feed source has been building in recent years, but for companies like Hexafly, it was the EU Commission’s vote in December to open the aquaculture market to insect-derived protein that provided the catalyst to scale up from pilot production to commercialization.
With several players already staking claims in the European market, competition is hotting up, but Hexafly claims to have several key points of difference.
He said part of the feed source it is using for the larvae, for instance, comes from a brewing co-product.
“Our breeding process is a little different too. It is protected by IP (intellectual property) so I can’t say too much. We are also the first to bring to market a truly automated, mechanized post-breeding and production process that can be scaled up rapidly.”
Two-pronged growth strategy
He said that Hexafly’s strategy for growth would most likely be two-fold: one route would be to license the methodology, the IP, the technology and the mechanized process to customers, whilst the other would be to grow its own production capacity organically.
“Our plan is to establish three scaled up plants in Ireland and one in the UK in the next three years. With the latest round of funding we have the investment to do this and we are confident the demand is there.”
He confirmed that his company was already in talks with a major European fish feed producer.
“Initially fish feed will be our main target market; I think there will be a huge push towards the use of insect meal in aquaculture on the back of the EU ruling. We are working closely with one of the largest fish feed producers,” he said.
Whilst Hexafly’s initial focus is Europe, Hunt said there was a lot of potential for market development in West Africa and China.
“We are developing partnerships in Nigeria and China,” he said. “China in particular offers huge potential as it accounts for two thirds of global aquaculture production and the Chinese government is prioritizing food security.”
Hunt doesn’t see the cost of insect meal as a barrier to developing these markets, predicting that it would be cost-competitive with other protein sources within two or three years.
“Insect protein could potentially be cheaper,” he said.
In the longer term, Hexafly has an eye on all animal feed markets - not just aquaculture.
“In 30 years maximum I see insect protein being in most if not all animal feeds in Europe. It offers a 90% reduction in greenhouse gas production compared to other methods of producing protein and offers superior digestibility for young animals, which is a key metric for feed producers.”