Buzzy Business: This Singapore-Based Startup Raised $28 Million To Grind Flies Into Farm Food

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Armed with $28 million in support, Food technologies He specializes in animal feed and fertilizers, a seemingly simple ingredient that Black Soldier is known for.

LAs pests, flies are often associated with disease, decay, and death. For food technologies – this year’s honoree To watch the Forbes Asia 100– The negative attitude around flies and other insects is the possibility that they are not properly used for agricultural technology, also known as agritech.

“People approach soul with a lot of baggage, a lot of fear and disgust,” he said in an interview at the startup’s headquarters in Singapore. “We’re used to society looking away, and instead we get to see these creatures up close and see how amazing they are at what they do.

In the year Nutrition Technologies, founded in 2015, makes black soldier larvae supplements for animal feed and fertilizers. Its products include Hi.Protein, a protein powder for pet food, aqua feed or feed for chickens and pigs, and Vitalis, a liquid fertilizer to prevent fungal disease and improve plant health.

The company, which is mainly operating a two-hectare factory on the Malaysian border, aims to double its footprint in the country and eventually expand into new markets in Southeast Asia., including Thailand, Vietnam, Indonesia and the Philippines.

Investors flock to Nutrition Technologies. To date, the total has been raised. $28 million, the latest $20 million funding round by 2022 led by the Thai state-owned oil and gas giant. PTT. In June, the US agricultural giant Bunge It invested an undisclosed amount in the startup as part of a joint venture to expand into Southeast Asia. Two months ago, in April, the startup formed a partnership with Japanese trading house Sumitomo Corporation, which committed to import and sell 30,000 tons of nutritional technologies for fish feed by 2030.

In previous rounds, Nutrition Technologies’ investors included Hera Capital, Open Space Ventures and SEEDS Capital, the investment arm of Enterprise Singapore.

The company declined to disclose its current valuation and recent earnings. NTG Holdings, The nutritional technologies company reported revenue of $380,855 for the year ended Oct. 31, 2022, up from $73,402 a year earlier, while its loss for the same period widened from $4 million to $7.9 million, according to its annual financial statements filed in Singapore. Accounting and Corporate Regulatory Authority (ACRA) website. Nutrition Technology founder and CEO Thomas Berry said the company’s factory was opened in 2015. He said the figure “does not reflect sales or productivity” after it completes construction in 2022.

“We found that food technologies are the first driver of importance in Southeast Asia,” Buranin Rathanasombat, head of new business and infrastructure at PTT, said in a video interview. “They are not the first stage, they are at the first stage of commercialization… If they can improve in efficiency and product quality, they can be cost-effective to run their products in the Thai market or overseas market.”

In the insects-as-feed sector, Rattanasombat says Nutrition Technologies’ edge lies in its proprietary fermentation process and low-cost facilities. PTT’s investment includes providing expertise and resources—for one, Mecha V, PTT’s AI robotics arm, will work with Nutrition Technologies on “operational projects” such as automating production operations.

For the 44-year-old petrochemical company with a capitalization of about 1 trillion baht ($28 billion), the foray into agritech is part of an ongoing strategy. “We now have a new vision for our company… we are trying to shift our vision from fossil fuels to energy that addresses global climate change,” Rathanasombat says.

To feed black soldier flies, Nutrition Technologies incubates raw agricultural waste with bacteria, such as palm oil fibers or coffee grounds. Fly larvae feed on the litter until they are fully grown, a process that takes up to 10 days. Producers at the startup’s facilities then grind the larvae into flour or squeeze them into oil for animal feed. Separately, manufacturers mix the larval mats or digestate with the microbial extract from black soldier flies. The resulting product is a fertilizer containing living microorganisms known as a biofertilizer. According to the company, it takes a bioconversion process with 200,000 black soldier fly larvae to produce one kilogram of Nutrition Technologies’ flagship Diptia biofertilizer. About 3 billion larvae are present in the field at any given time.

“People approach insects with a lot of baggage, a lot of fear and disgust… We benefit from the community looking away.”

Martin Zorilla, Nutrition Technologies CTO

Nutritional technologies were specifically selected for the immune system of black soldiers, said Zorrila, a former graduate fellow at Cornell University. Unlike mosquitoes, flies are not contagious for diseases, otherwise known as zoonoses, which some animals can transmit to humans. The genes of the black soldier fly can produce more than 50 antimicrobial peptides, molecules that help the immune system, according to open access. Research paper It was published in Microbiology Spectrum in the American Journal of Microbiology last January.

“People may not know exactly what’s in their food, but many food ingredients have very high risk profiles,” says Zorilla. Examples include grains and animal feed contaminated with fungi species known as mycotoxins. While there are regulations on these substances, they vary around the world – for example, the maximum level of deoxynivalenol, a type of mycotoxin, in animal feed is 10,000 parts per billion (ppb), but only 5,000 ppb in the US. “Compared to conventional food production systems…insects are actually an incredibly clean and efficient way to feed animals,” he added.

Global meat production will reach 364 million tons by 2022, driven by population growth and improved purchasing power in urban economies, with meat prices at an all-time high. basis Food and Agriculture Organization of the United Nations. Meeting the high demand for meat has enormous environmental costs, especially for the staple crops soybeans, corn, and livestock that must be fed. Up to 80% of the world’s soybeans are used as a protein source to feed land animals, according to the Global Fund for Nature, but farming soybeans is land- and water-intensive, causing deforestation in major soybean-growing countries. Exporters such as Brazil. More broadly, the continued pressure on staple crops is one of the things that make food systems more vulnerable, coupled with ecosystem degradation and a growing world population that will reach 9.7 billion by 2050 – writes the United Nations Commission on Population and Development in 2021. Report.

Insects such as the black soldier fly have been found to be a potential source of protein for cattle, although more research may be needed to confirm their effectiveness. Black soldier fly larvae are rich in fatty acids, proteins and minerals, although these larvae cannot yet “completely replace” soybean meal, according to 2022. Evaluation By researchers in Thailand, published in the open access journal Insects.

Nutrient Technologies may face competition from other insects-as-food startups headquartered in Singapore as they aim to expand in Southeast Asia. Last May, Entobel, which focuses on aquafeed, raised $30 million in funding. Months ago, last March, Insect Feed Technologies raised $1.25 million ($918,000) in seed funding to develop black soldier fly fish feed and pet food. Large EU companies in the sector have announced plans to expand in Southeast Asia. These companies include Netherlands-based Protex, which raised an unknown investment from a billionaire John TysonTyson Foods in October, and Paris-based InnoFeed, led by Singaporean investment firm ABC Impact, which raised $250 million last September.

Regulations for the use of insects in animal feed vary greatly around the world, a potential headache for producers. In the US, authorities prohibit pet food, fish and animal feed manufacturers from directly incorporating black soldier flies into their products, but they can apply for product use. permission To import crickets, mealworms and other insects. Currently, black soldier flies cannot be used to feed animals intended for human consumption, but they can be used in products for pets such as dog food. Animal feed manufacturers in the EU and the UK are allowed to include animal residues in their products, including insects, including animals intended for animal consumption – but under a 2021 amendment to the law, these insects cannot be fed any litter containing animal residues. The scientific rules on breeding insects are not well established, and some scholars question the ethics of such breeding when there is no scientific consensus that insects can feel pain.

“The most challenging part of our expansion is definitely understanding the different biological constraints and figuring out what the unknowns are,” says Berry. Noting the challenges of optimizing variables such as temperature, airflow and growing trays. Fortunately, where we are today, with all kinds of industry concepts, we believe that most of them are now being fulfilled.

A former program manager at the United Nations, Berry met Nick Pigott, co-founder and CEO of Nutrition Technologies, while working on the United Nations’ food security programs in Sierra Leone, West Africa. Piggott was a program consultant for the United Nations Population Fund, but “working in a large institution, we couldn’t hit our targets,” Berry said. Their idea of ​​creating an increasingly circular economy, where agricultural waste can be used as the basis for compost, served as inspiration for food technologies.

Next year, the agritech startup plans to launch several new Black Soldier bio-fertilizers, building on the startup’s latest product line, Diptia. Biofertilizer contains insect chitin, which can stimulate the plant’s immune system. To increase its production capacity, Nutrition Technologies aims to raise a “mix of debt and equity” as capital to begin building a second industrial plant in 2024, which Berry said would triple the size of the current plant.

“In five years, I hope to have a network of different food technology factories around the region…that will support the local economy and improve food security,” says Berry. That’s what we love, and that’s what we want to do here in Southeast Asia, before we branch out to other regions of the world.

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