The $600 Million Lesson: How Misaligned Unit Economics Crushed Ÿnsect
The judicial liquidation of French insect farming startup Ÿnsect marks a catastrophic end to one of Europe’s most hyped ag tech ventures. Despite raising over $600 million and garnering celebrity endorsements from the likes of Robert Downey Jr., the company collapsed under the weight of strategic indecision and premature scaling. Ÿnsect’s fundamental error lay in its inability to choose a viable lane it oscillated between low margin animal feed, high margin pet food, and human consumption markets. This lack of focus led to the acquisition of Protifarm for human food applications a sector generating negligible revenue at a critical moment when the company needed immediate cash flow, not long term speculative bets.
Ultimately, the company fell victim to the "Giga Factory Trap." Ÿnsect committed hundreds of millions to building the world’s largest vertical insect farm in Northern France before it had proven its unit economics or secured a foothold in a profitable market. The core thesis replacing cheap commodities like soy and fishmeal with insect protein failed because animal feed is a volume game driven by rock bottom pricing, not sustainability premiums. . By the time leadership pivoted toward the higher margin pet food sector in 2023, the capital intensive weight of their industrial infrastructure was already dragging them underwater, mirroring the scaling struggles of other European "moonshots" like Northvolt and Lilium.