AgriProtein, a company once named one of Time’s “top 50 Genius Companies,” quietly entered administration in February 2021, and in June 2021, the company’s assets were acquired by Prezero U.S. for USD 10 million. How did this once-promising company end up in liquidation?
In 2010, AgriProtein set its footing in the insect protein industry by rearing black soldier fly larva in a pilot-scale facility in Stellenbosch, South Africa. Its operation focused on an innovative method to produce insect-derived feed ingredients and a co-product fertilizer. The company launched its first full-scale facility in Philippi, Cape Town, in 2014, exhibiting initial momentum with the ambition to construct many similar facilities worldwide. This ambition, fueled by a USD 105 million funding round in 2018, placed AgriProtein as a pioneer in the insect feed industry. However, the impressive momentum and capital raised set unrealistic expectations for the timeline to achieve industrial scale. AgriProtein sought to build 100 factories worldwide by 2024, with an additional 100 by 2027. This outsized goal led to scattered focus and excessive commitments for a space just beginning to understand consumer needs. While joint ventures seemed a strategic move, the company found itself lacking in resilience and agility, not to mention facing unexpected disruptions, such as a global pandemic.
COVID-19 seriously impacted AgriProtein. The closure of foodservice establishments disrupted the sourcing of AgriProtein’s foodwaste feedstock; simultaneously, the company had to adopt social distancing measures, further impacting its operations. AgriProtein struggled, unlike other companies like Ynsect, which thrived during the pandemic due to strong automation capabilities. Moreover, the uncertainty surrounding the timeline for scaled usage of insect protein within livestock feed cast doubt on AgriProtein’s growth prospects. With conventional ingredients, like soy and fish meal, at a lower cost, AgriProtein’s high operating costs from a large employee headcount and an underutilized manufacturing facility strained its financial stability. The company reported a USD 38.9 million loss in 2019 and later halted operations.
The company made a fatal set of miscalculations: Even without the pandemic, it would have struggled to deliver on its aggressive scale-up goals. Not all wastes are the same — very few are ready for commercialization, and most require extensive characterization to commercialize. Lux’s Waste Framework will help you avoid the pitfalls that that ultimately consigned AgriProtein to the waste bin of history.