From a corporate finance point of view, we analyse investments in insect-based biotechnology, a booming market. In this case, we will analyse the investment made in BioFlyTech by Moira Capital Partners.
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From a corporate finance point of view, we analyse investments in insect-based biotechnology, a booming market. In this case, we will analyse the investment made in BioFlyTech by Moira Capital Partners.
Bioflytech, a technology-based company that for the last decade has developed an innovative technology that allows the artificial breeding and mass production of several species of decomposer insects. For this reason, BioFlyTech has managed to specialise in the industrial production of the black soldier fly, considered to be one of the insects with the greatest potential due to its great capacity to reproduce, its speed of movement and its versatility as a product.
Bioflytech, which was born as a spin-off of the University of Alicante created by the entomologist and researcher Santos Rojo has the necessary technology for the production of larval biomass on a large scale in aquaculture and poultry farming, as well as in the pet food and fishing bait markets. However, Bioflytech continues to expand its business and is looking to open up the field of pesticides, insecticides, production of sterile larvae for medical use or obtaining components of industrial interest (organic humus, biodiesel, chitosan, etc.). To achieve this, the company is currently in advanced negotiations, both nationally and internationally.
The investment firm Moira Capital Partners has committed a €16m investment in Bioflytech. Moira Capital Partners is chaired by Javier Loizaga, known for leading Mercapital, one of the most important companies of private equity which was merged in 2012 with N+1.
The industrial production of insects dedicated to human food processing is one of the fastest growing sectors, as many investments are being made to expand the technological development of this field. In fact, this type of industry is considered to be the food of the future because of the advantages it offers. For example, it optimises resources and eliminates the problems linked to traditional livestock production, such as the space to house animals and crops, water consumption costs, production of greenhouse gases, maintenance of livestock and land, etc. It is for this reason that this investment is considered to be the most important bet in the field of insect production in Spain and BioFlyTech is expected to reach sales of approximately 40 million euros in 2024.
In relation to the transaction, Moira Capital will provide, in a first phase, €6m to BioFlyTech with the objective of building and starting up the largest plant in Spain, located in Alicante, for the industrial production of insects, which is expected to manufacture almost a thousand tonnes of insect protein per year.
After this first phase, the company will carry out a second capital increase of €10M, which will bring Moira's shareholding in BioFlyTech to 80% in 2019, with the aim of investing in the construction of new industrial plants and larval rearing facilities. This will enable the production of more than 20,000 and 5,000 tonnes of high quality animal protein and fat, respectively, within 6 years.
The following table lists five international companies involved in insect technology. The graph highlights the investment of more than 40 M$ received by Oxitec, a British company specialising in the control of insect pests to prevent disease. It is also worth noting the success of the French company Ynsect, which in less than two years has become one of the largest insect production centres in the world.
| Company | Country | Description | Total Investment ($) | Date |
|---|---|---|---|---|
| Letgo | United States | Letgo is a second-hand shopping app that helps users buy and sell locally. | 975M | 8/08/2018 |
| 5miles | United States | 5miles is a mobile marketplace application that allows you to buy and sell second-hand goods and services in your neighbourhood. | 52M | 27/08/2018 |
| IfOnly | United States | IfOnly is a marketplace for "unique experiences". | 51,6M | 4/04/2018 |
| TROCAFONE | Brazil | Trocafone is an online marketplace for buying and selling used electronics, especially smartphones. | 51,6M | 22/08/2018 |
| Maihaoche.com | China | Maihaoche.com is a Chinese automotive e-commerce platform. | 80M | 13/03/2018 |
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