Antoine Hubert On Raising $435 Million To Build The Biggest Insect Farm

Antoine Hubert is the cofounder of Ynsect, which is dedicated to insect breeding and derivative bioproducts manufacturing, such as oils and protein powders. His company has raised $435 million from top-tier investors like Supernova Invest, Caisse d’Epargne, Footprint Coalition, and Arnmat Group.

In this episode you will learn:

• How Ynsect is automating insect farming and produce
• How they are creating a vertically integrated deep tech agricultural business
• Antoine’s top advice for other entrepreneurs
• The importance of bringing in advisors and coaches earlier

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About Antoine Hubert:

Antoine Hubert is Ÿnsect’s cofounder, Chairman and CEO. He also leads the cooperative insect industry association, the International Platform of Insects for Food and Feed (IPIFF) and is Board Member of Agrocampus Ouest, Agriloops and LFD.

Prior to co-founding Ÿnsect, Antoine Hubert worked on scientific projects in environmental risk assessment, biomass and plastics recycling. He is an agronomy engineer graduate from AgroCampus-Ouest and AgroParisTech. Together with Alexis, he co-founded NPO WORGAMIC and the company ORGANEO.

Connect with Antoine Hubert:

• Linkedin
• Crunchbase
• Twitter

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FULL TRANSCRIPTION OF THE INTERVIEW:

Alejandro: Alrighty. Hello everyone, and welcome to the DealMakers show. Today we have a really cool founder from Europe. I think that we’re going to be learning a lot about the use of worms, about agriculture, and you name it. Then, also, about how to go against uncertainty and against this crazy 2020 that we’ve all experienced. So without further ado, let me welcome our guest today. Antoine Hubert, welcome to the show.

Antoine Hubert: Hello, Alejandro. Hello, everyone. It’s very nice to be here. Thanks for the invitation.

Alejandro: So born in Paris. How was life growing up in France?

Antoine Hubert: It has been a long journey for 38 years. I was a kid really impassioned about nature and insects to today, an entrepreneur, farming insects and working in agriculture.

Alejandro: How did you develop this love for insects, and agriculture, and biology? How did that happen?

Antoine Hubert: I don’t know if my parents did anything special. Growing in the Alps, you live with the nature and the weekends in the mountains with flowers and trees and insects and butterflies. I was quite impassioned by these species. Then, also watching a lot of documents, papers, and photos about animals. I wanted to be a biologist to work with the animals in Southern Africa or to later understand our origin. Where do we come from, and how life became, and from dinosaurs even before life. That is something that has always impassioned me to understand the biology of life here, where we come from, and also beyond that point, I was at some point waiting to be a xenobiologist, which understands if life happened in space. Then after long studies, I became an engineer in metaculture with some background in biology and ecology. Then my career started.

Alejandro: That’s amazing. And after you got your studies, here you are in the Caribbean discovering worms. How was that?

Antoine Hubert: From the Caribbean to New Zealand, I was an engineer in a research center in New Zealand [3:45]. I was working on agriculture pollution in forestry and in agricultural territories. One scientist started a project to work on the recycling of a quest to improve the waste efficiency in the regions by using worms. They asked me, “Do you want to be part of this project aside your humanities?” I was keen to understand because, during my studies, I worked a lot in agriculture, ecology, and soil ecology, the impotence of the small animals we see, the worms, and the ones we don’t see, the microbes in the soil that explain all the fertility and all the functioning of the soil to clean water and to restore the ecosystem. It’s a critical part. We always talk about water pollution, air pollution, and soil pollution. It’s very critical for us. There is a Greek philosopher who said a long time ago that the overall human society is born [5:02] because of this thin 60-centimeters layer of soil everywhere in the world. We [5:11] 60 centimeters of soil [5:14]. You don’t have the human beings as we are today. So soil is key. I found this idea not to try to see worms in the soil, but try to work with worms to recycle our quest. Then then, back to France. I decided to learn NGO beside my career and environment to promote this idea in Paris and, more importantly, in France to use worms at home and in schools – build a smaller campus and recycle and do some gathering of the compost and do your own vegetables and your own tomatoes, etc.

Alejandro: So doing the NGO gave you the access to understand how you’re able to start something and build something. I think that was a really nice segue that led you into building your own for-profit business, Ynsect. So tell us about how you came up with the idea and concept of Ynsect and how you went about bringing it to life.

Antoine Hubert: Ynsect organic where it is a non-profit organization, but as a real entrepreneur journey, we started from nothing and ended up with a lot of partnership and the development of societal gain and additional toolkits promoting organic farming, composting, food-waste processing, etc. At some point, we were very confident, modest thinking, and we were doing some research and reading regularly, and we found the topic of insect farming in Asia in 2008, 2009, I think, where initially they decided to farm insects. Insect farming is not new. The thing about [7:13] is like a century-old business in China. We know the [7:18] 500 years ago, so it’s not new. [7:25 – 7:30] human food in China and animal feed. It’s quite small-scale, and it’s a local conception. The United Nations started to promote the idea to farm in [7:44] as human food and animal feed, and we picked up the idea and use it in our NGO part of our additional toolkits. But at some point, we were a bit frustrated about the real impact of education. We need to repeat a lot of things to be well understood. [8:06] the bridge between these group of friends from high school and the Group India Association and say maybe there’s something to do with insects and not only just talk about it and do educational tools and tell you things about it in schools, but trying to farm them and pose them to offer products on the market and have a real impact, a shorter-term impact and a long-term educational impact. So after a few months of execution, we decided to spin up this idea into a form of a company, mission-driven, with this willingness to have a positive impact on the food system ability, the food systems.

Alejandro: What was the next step once you got a line on, “Hey, let’s do this thing. Let’s make it our for-profit.” What were the next steps?

Antoine Hubert: Particularly, we discussed a lot. We were all in different fields of advisory in different companies. We put ideas together, the vision, and we tried to pitch the idea in different awards – startup awards, contest, pitch, level of pitch. In 2011, 2012, we started to get some awards. We realized that we were not the only ones to think it’s a good idea. Some institutions, investors, and scientists decided it was good rushing this idea and that it was interesting. The concept of farming co-existing and addressing these markets, and some idea of technology. But then we realized we were lacking a lot of knowledge, and we built up a group of researchers, research centers, and universities in France in a consortium, and applied to a national grant about food sustainability, and we won this grant, a 2 million grant in 2012. So it was this real positive signal when I decided to quit my job to be full-time on this project and then to go to a startup incubator in Paris. Then a few months later, we got a co-founder in the Paris region to get a long-term loan, and we could hire the first people earlier – two first investors in early 2013 and start for us the next payments and try to understand better about insects.

Alejandro: What ended up being the business model for the people that are listening to understand how you guys also make money?

Antoine Hubert: Basically, like any farm or any manufacturing business, we buy all our materials, food-wise. We mix them to make a good recipe [11:10]. Then we have a farm. In this farm, everything is automated in terms of how we feed or how we collect. We harvest, and we get eggs from the [11:25]. Then the insects are processed, and we get a protein meal to feed animals, and we converted the manure to get a very good fertilizer. Then we send the product to feed manufacturing companies that then sell to fish farmers, to salmon farmers, to shrimp farmers – goes eventually to retail, etc. We also sell pet food. We sell 14 ingredients to a pet food company that makes all their ingredients to [12:04 – 12:09]. The fertilizer is either mixed or used by farmers – vegetables, crops like wheat and corn, or even vineyards. And even consumers, next year, will be able to buy our fertilizer [12:27] for their own garden. We are a B2B company. We’re upstream in the food chain at a beginning. We are impacting how we feed animals, how we feed plants, and then we are addressing the plants of any consumer in the world, whatever the diet is. They could be vegetarians or meat lovers. These people will eat them in their flats, animals, a bit of fish, and all plants like vegetables, etc. And we are turning the world, animals, fish, and plants are basically produced [13:08].

Alejandro: That’s amazing. How did you go about raising money? How much capital have you guys raised for this so far?

Antoine Hubert: Total money is 435 million dollars. We also got some grants and some commercial loans. We did four rounds from seed to A, B, and C. It’s a deep tech business, so we had to do deep science to be able to – first of all, to understand tech biology – everything on how to do automation and develop technology to do everything you need to feed, to harvest, to recover, to process the insect, the biology. Then do a lot of research to understand the properties of our products in animals and plants, so we did a lot of research to explain farms, feeding salmons and shrimps with well-known universities from Norway, Greece, Thailand, France, Germany, Portugal, and the U.S. to see if the products were good and safe, good additional profile, and also if there are any benefits and we form amazing health benefits and [14:29] benefits on all animals and the plants we were addressing. All these different assignments were part of our equity needs, so we understand better and develop IP as we are this deep tech company is quite a long-term. It’s not a few years we are comfortable like a SaaS or software company. So you have to understand this, but they want to ensure that all the money they invest for a long period of time is politics, so the IT is key. This is why today we have 250 patents feed in the world are coming from about 30 native patent families. However, I think the investment in research and innovation we’ve done through not only in biology and on the end-user applications, but also in all the automation and this virtual farm concept how we meant in temperature and moisture in our [15:32] but also how we have the best technology to actually cover feed and process insect to get the best between protein and the menu of fertilizer. So it’s a long research, and it’s early in the concept. The concept was the scaling of the technology and the pollution capacity; that was the main thing. Then there was to convince customers and ending up to date to one of the five million contracts signed, so all these commercial commitments also was a very good sign, which also explains the last round and the size of the last round. We have customer demand now, which is pretty high. And we have been running a small-scale plant, which is still about 3,000 square meters, so it’s not a smaller, sort of very small scale, but still, it’s a showroom or all of the technology or four years, which was a good thing for an investor to see, to visit the plant to see if it’s real technology. The products out there. It’s tangible. The code of customers see why they are loving our products, and that explains the succession of equity rounds and then their funding on top of it.

Alejandro: The last funding round was probably one of the most challenging, so why was that the case?

Antoine Hubert: I think it was raising more than 200 to [17:15] eventually in this round was quite complex, along with financial engineering between the main equity, and also some debts. Add that all together in contrast within shareholders and lenders. It took quite a while because it was a big shake of French companies [17:34]. We are not a software company, so it’s even less usual assets and manufacturers. And between the food and ag, which is even less usual today, so the debt of investor basis was not huge, which was all about the world in Europe and the U.S., Asia, to make a lot of investors back in 2018, and to finally make the deal in early 2019. It was a long process, but we managed to convince everyone and to line up a lot of investors from different countries or from France, from the UK, from the U.S., from Hong Kong and Singapore. I wanted to close it in November and finally in early January, and then I wanted to close it before Christmas, so it was a very long Christmas holiday – not restful and even more because my second kid was born in December, so it was quite a challenge to be able to take care of him and be with my wife and take time with the family as we always want to do, but at the same time, finalize the deal, while during the holidays, nobody’s there. You wait, and then you finally close it. It was quite a shot of adrenaline and stress, but it ended up very well eventually.

Alejandro: And, obviously, 2020, not only challenging on the financing and getting that to the finish line, but then also COVID and the pandemic and how that has affected, as well, the operation, and especially, with some new announcements made by the government. So tell us about that.

Antoine Hubert: Yeah. This year has been another strange and difficult year for many, many companies. Fortunately, we are quite resilient toward COVID. We are a food business, so we are an essential business; our customers are still buying pet food and fish feed. We started our flagship plan, the large plan, which is really the last type of [19:58] plan and industrial movement. It’s [not] for France. We got the environmental green light. This time was on Friday. We rested it on Saturday. So we ran to the site on Monday morning with all the big trucks to start to [20:17]. In the evening, our French president announced to our nation that the country was starting lockdown the day after tomorrow on a Tuesday. It was quite a shock, and we couldn’t start the works, and we got some freight on Tuesday. We did not know if we could carry on, and finally, we could carry on the works. It was not as fast as we wanted initially, but it could progress, and we are still progressing well today until the end of ’21. So it was quite another shot of adrenaline. Eventually, our business is resilient. We could run the business even though we had to be remote-working at corporate. We had to freeze the RND because it was a difficult time for all colleagues. They couldn’t work for a few weeks in the first lockdown, which was very severe. But the second lockdown in France is more flexible, so the lab is able to run, and many colleagues are able to work in safe conditions. We are, obviously, looking forward to a more open situation and putting January the vaccine. We hope 2021 will be, at least the second semester looks more normal than what we had in 2020.

Alejandro: Absolutely. Now, just to get an idea of the size of Ynsect today, how many employees do you guys have?

Antoine Hubert: We have 135, and we will reach 250 at the end of next year in a one-year time because we are hiring a lot of people. We will be operating our bee farm, and fishing plants in the north of France, so more people will join there in this French region. We have already a million in France with a business. We have an office in the U.S. in Miami. We launching a Chief Intelligent officer and we are looking now for [22:34] in the U.S.
Alejandro: That’s amazing. Imagine if you go to sleep tonight, Antoine, and you wake up in a world five years later, where the vision of Ynsect is fully realized. What does that world look like?

Antoine Hubert: We will be operating a few vertical funds in the world in France and North America, Asia, [22:55], at least 500 million revenues, and we are most likely be in the big markets, at least somewhere. I don’t know yet, but that’s eventually a possibility because we are building something certainly unique with such a depth of markets. Just today, we are introducing pet food and fish feed, and beyond the chicken market, a fish market, a human market. Only with pet food and fish feed we could build 100 plants and farms – a very big one we are building in France. So, 100 other plants in the world for this segment of fish feed and pet food, and [23:40] plant is at least 100 million revenue. So it’s quite crazy, and again, we’ll go beyond human food and other feed applications. We have a sense that we can build something which is meaningful, with positive impact for the environment, and which could be easily understood by people. It’s about food. It’s about what we eat every day. It’s a necessity, so something that could be very good for anyone in the markets that makes sense, and people are already looking for this kind of unique company. A lot of institutional investors are looking for mission-driven and impactful companies today.

Alejandro: You’ve mentioned sustainability, the environment, too. There are a lot of people now that are starting to be more mindful about all of this – client change and so forth. Obviously, being at the right time in history when it comes to building and scaling a company is everything. So would you say that perhaps the timing and also these new trends and that level of consciousness has helped to push the wind behind you guys’ backs?

Antoine Hubert: I think, yeah. The inventor mindset is now focused on impact much more than before, and we are right at a good time, I think. Five years ago, it was too early for this kind of proposal, or ten years ago even more. About five years ago, you had the company boom like this in the U.S., and you see it most distantly beyond [25:16], so listed as [25:17]. You see the huge success of these companies, so I think it’s a good time for companies to have an impact. We call it in France, Tech for Food Movement, which is very good and important here. The money is there in the private market and the public market, so as long as you execute your project well, especially in this area of [25:42], a tangible asset like what we do, the pollution, manufacturing is really meaningful. You see billionaires like Bill Gates investing in new sorts of food and [25:58] with new plants to [26:04] the grids with less carbon emissions. There are so many things to change about how we produce things that it’s really a good time for a company like us.

Alejandro: Antoine, imagine you had the opportunity to go back in time and have a chat with your younger self, perhaps that younger Antoine back in 2011 that was thinking about starting a business. Now, it’s been quite a while. You’ve gone through the ups and the downs, the ugly, the celebrations; you name it. If you were able to go into that time machine and have a chat with that younger Antoine, based on what you know now, what would be that one piece of advice that you would give to your younger self before launching a business and why?

Antoine Hubert: The most difficult thing is always about human relationships. When you build an organization, you build a society with people working together as a group, and you need to find a good balance. I would say I was not an entrepreneur before, even when we had this experience in Niger. It was more passion about getting there. But just on the good side, it was nothing really challenging. I think I would say not to be too naïve and be well-advised by the good people, the advisors. But also, always hire better than yourself, which is what we try to do. Sometimes, we missed, but more in general, we were quite successful. But sometimes, we are able to yet take the faster good decision related to equipment or when you need to, unfortunately, dismiss someone. The most difficult part is always human relationships in a company. This is something that we are never well prepared, so I will say to me five years ago to be less naïve and take some management lessons or have a coach earlier. I’m followed by a different coach, but maybe I would have needed to study with a coach right at the beginning.

Alejandro: I love it. Antoine, for the people that are listening, what is the best way for them to reach out and say hi?

Antoine Hubert: Twitter or by email: An***********@Yn****.com or @AntoineHubert on Twitter.

Alejandro: Antoine, thank you so much for being on the DealMakers show today.

Antoine Hubert: Thank you, Alejandro. It was nice to talk to you.

If you like the show, make sure that you hit that subscribe button. If you can leave a review as well, that would be fantastic. And if you got any value either from this episode or from the show itself, share it with a friend. Perhaps they will also appreciate it. Also, remember, if you need any help, whether it is with your fundraising efforts or with selling your business, you can reach me at al*******@pa**************.com.

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