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Ÿnsect's Downfall Signals Trouble for France's Tech Darling

Paris - The once-promising French insect protein startup Ÿnsect has collapsed, with a commercial court in Évry ordering the company's liquidation after it failed to find a buyer. The downfall of the former tech darling is a major setback for France's ambitions to nurture industrial champions.

Ÿnsect, which had raised over €550 million from investors since its founding in 2011, was unable to turn its ambitious plans for large-scale insect farming into a viable business. The company had built a massive vertical farm in Poulainville, northern France, but struggled to ramp up production and find sufficient customers for its protein products made from mealworms.

After being granted a year-long protection from creditors under a safeguard procedure in 2024, Ÿnsect was unable to secure new investment or find a buyer, leading the commercial court to order its liquidation on December 1st. The move will leave the company's remaining 43 staff members out of a job.

"Ÿnsect had simply grown too big, too fast," said one industry source familiar with the company's challenges. "The scale of their ambition outpaced their ability to execute and deliver a commercially successful business model."

Ÿnsect's collapse is a blow to France's efforts to cultivate a new generation of industrial champions, particularly in innovative sectors like sustainable food production. The startup had been hailed as a poster child for the country's "French Tech" movement, which aimed to foster domestic tech and manufacturing firms that could compete globally.

"This is a major disappointment and a cautionary tale," said Jean-Baptiste Bachelerie, a Paris-based venture capitalist. "Ÿnsect's failure shows the difficulty of scaling up deep-tech hardware startups, even with substantial funding."

Industry analysts note that Ÿnsect's troubles mirror challenges facing other ambitious agritech ventures, which have struggled to translate early technological breakthroughs into commercially viable businesses. The capital-intensive nature of building large-scale production facilities has proven a major obstacle.

Going forward, investors may take a more cautious approach to funding such moonshot projects, focusing more on near-term profitability and business model viability. The fallout from Ÿnsect's collapse is likely to reverberate across France's startup ecosystem, raising questions about the country's ability to cultivate the industrial champions of the future.