Indian insect biotech startup Loopworm has raised $3.4 million in seed funding in partnership with Indian agricultural products VC Omnivore and WaterBridge Ventures.
Loopworm is the first Indian technology startup to breed insects for animal feed.
Titan Capital and leading angel investors including Godrej Agrovet chairman, Nadir Godrej, former head of R&D and sustainability group at Indian conglomerate ITC, Sanjiv Rangrass and Log9 Materials founder and CEO Akshay Singhal also participated in the round.
The investment is Omnivore’s second under its OmniX Bio initiative, which supports early-stage agrifood life science startups.
The funding will enable talent acquisition, research and development acceleration, as well as Loopworm’s first factor operating in North Bangalore to expand production.
From waste to animal feed rich in protein and micronutrients
Loopworm grows insects on food waste and turns them into value-added products for the animal feed industry.
The company buys this food waste, which it likes to call “organic by-products,” from food processors, retail food chains and fruit markets. Through biochemistry and fermentation, it is currently being made suitable for the reproduction of black soldier fly insects. The insects then become the final feed for shrimp and poultry.
The concept for Loopworm came about after co-founders Ankit Alok Bagaria and Abhi Gawri met at Enactus, a nonprofit that promotes social entrepreneurship among university students. They both had ambitions to start a social entrepreneurship venture and solve India’s food waste problem, which, according to Bagaria, was crucial given the country’s growing population.
The United Nations Environment Program estimates that India wastes about 68.7 million tons of food every year. The country also produces about 141 million tonnes of crop residue waste, of which 92 tonnes is simply incinerated.
“Our main concern was that we have a significant amount of food waste around the world in India as well, and there was not a very meaningful solution where the food waste was actually recycled. There are solutions like composting or biogas production, which actually lowers the yield,” Bagaria said AFN.
This led them to start projects in paper and plastic recycling, but then they came to another reality; that food waste was considered a resource of negative value.
“If you consider other types of waste such as plastic, paper, aluminum, glass, batteries, e-waste; they all have their own markets. There is a reverse logistics mechanism and there are recyclers on the ground. But when it comes to food waste, people just want to throw it away. That was our starting point,” he says.
The two began working on Loopworm in 2019, beginning their research with fish and poultry farmers.
Production and market access
Until now, Loopworm has been funded by government grants and foundations. It has a pilot breeding and processing facility producing 50 kg of insects daily.
The product is not yet available for sale as Loopworm conducts feed efficiency and formulation testing of its product on different animals at different life stages.
This new round of funding will help them set up a commercial plant that will be ready for operation by January next year. The startup is targeting a full production capacity of 25,000 tons per year.
Over the next five years, the startup aims to produce 300,000 tons of sustainable insect-based protein per year, creating value from 7.5 million tons of food waste and agricultural products.
Loopworm will also operate on a B2B model, supplying proteins or fats to feed manufacturers and pet food manufacturers.
It wants to hit the market within 18 months, selling not only in India but also in the US and European markets, where it expects to find higher demand and prices.
Regarding fundraising, Bagaria notes that some startups may take longer to secure funding than their counterparts in developed countries, where economies are geared more toward sustainability and climate technology.
“People talk about climate technology and sustainability, but they have limited confidence in the solutions as businesses. It actually complicates the whole fundraising process,” he says.
“They are very appreciative of all these solutions because they understand the value, but the funding coming in is limited. You have to show and demonstrate a proof of concept before you can secure a deal, and we’ve been doing that since we started. Once you secure the funding, I guess the journey will be easier because it shows that the business is working.
The startup is currently focused on generating revenue and maintaining scale, and in the future will explore different features or functions of insect-based products for human consumption.
“Insect-based products mainly promote sustainability, whereas my feeling is that they need to promote health and nutrition first, and then sustainability in addition,” he said.
“Sustainability alone cannot drive insect-based food for humans because there are a number of options. You have many plant-based options, mushroom-based options, and the options are overwhelming. There must be a significant health or nutritional benefit that would bring it to the human market.”
What do they say?
“Omnivore is delighted to support Loopworm as part of our OmniX Bio initiative, which seeks to pave the way forward for agrofood life sciences in India. Loopworm sees great potential in transforming cultured insects into value-added nutrients and ingredients, and Omnivore believes the company will soon become one of India’s leading biotech startups,” said Mark Kahn, Managing Partner, Omnivore.
Ashish Jain, Partner at WaterBridge Ventures commented, “We are excited to see Ankit and Abhi come up with solutions for traceable sustainable and scalable food sources. Sitting at the pinnacle of climate technology and food technology, Loopworm has the potential to continue moving up the value chain as its product suite evolves and emerges as a truly scalable player.