The week of December 29, 2025: Insect disappointment, the debt, silver, California’s proposed wealth tax, and more.
The week of December 29, 2025: Insect disappointment, the debt, silver, California’s proposed wealth tax, and more.
Some larvae never get to fly.
Ÿnsect, a French insect farming company, has been placed into judicial liquidation, despite having raised some $600 million, including a big slug (so to speak) from taxpayers along the way.
This was not, obviously, how things were meant to turn out.
Turn to the company’s website:
Founded by scientists and environmental activists in 2011, Ÿnsect is pioneering a new industry realizing the full potential of mealworms [mealworms are the larval form of the yellow mealworm beetle]– putting them at the service of humanity, the planet, and the living world at large…
We are constantly looking for balance; not only our own, but also that of our environment and our stakeholders. We cultivate boldness and creativity, while remaining driven by a culture of results of a nuanced scientific topic, within a wide and busy field. We have big ambitions yet remain modest, particularly in terms of our contribution to huge environmental challenges we face: we play our part, but also count on our partnerships and the coming together of solutions to truly affect change.
Founded by scientists. Sounds good.
Founded by scientists and environmental activists. This might be less of a business proposition than investors might hope.
Read on to discover the reference to “stakeholders,” a word that all too frequently signals trouble, sometimes for believers in the democratic process, sometimes for shareholders, sometimes for both.
Nevertheless, the company evolved, raised a lot of money, and in 2020, it joined the Next40, a French government organization “that promotes promising companies.”
And then it “was invited to Davos for the first time, at the World Economic Forum.”
For potential investors interested in economic return, the red flags are piling up (and let’s not forget that largely ornamental umlaut, a device best confined to heavy metal).
And then there was the section dedicated to “Our Commitments,” and below that the three dreaded words, Environmental, Social, Governance, ESG for short.
Among the “social” commitments” is this:
Committed to gender parity, in 2024, our gender equality score was 96/100. We also joined the French Tech’s Parity Pact that implements tangible actions to make France’s startup ecosystem more equal…
Manage for shareholder return, you say, how passé.
Run away, investors, run away.
But actor Robert J. Downey’s Footprint Coalition ran toward. As TechCrunch reported in January 2021, the Footprint Coalition:
[N]ow has five portfolio companies, a nonprofit initiative, and is launching a rolling venture fund, Footprint Coalition Ventures, at the World Economic Forum’s Digital Davos event.
Davos, again.
Ÿnsect was the Footprint’s second publicly announced investment. The first had been a bamboo-based toilet paper company Cloud Paper.
With the new rolling fund, managed through AngelList, Downey Jr.’s initiative sits at the intersection of two of the biggest ideas reshaping the world economy — the democratization of access to capital and investment vehicles and the $10 trillion opportunity to decarbonize global industry.
Ten trillion dollars! (Add Dr. Evil voice.)
Click on the link to see where that number came from, and arrive at Financial Management, July 2020:
In an urgent [but, of course] call for companies to move away from business-as-usual to environmentally and socially sustainable models, a recent World Economic Forum report spotlights three key areas with trillions of dollars of existing market opportunities and millions of jobs as countries and companies plot their paths to recovery from the pandemic.
A second report in its “New Nature Economy” project, Future of Nature and Business 2020, published this month, said that transformations in food, land and ocean use; infrastructure and the built environment; and energy and extractives can generate an estimated $10 trillion in business value and create 395 million jobs in ten years.
The WEF’s claims of the trillions of dollars to be made and hundreds of millions of jobs to be created were nonsense, but they were all part of the organization’s attempt to use the pandemic as a recruiting sergeant for its “great reset.”
But in 2020, a lot of people were drinking the Kool-Aid:
“If there is one thing we learn from the COVID-19 crisis is that societies can [change] when we must,” said Svein Tore Holsether, president and chief executive officer of Yara International, a [Norwegian] food and agriculture company [and one that was and is publicly quoted], at the report’s launch. “Faced now with overwhelming urgency, we have a short time frame to make dramatic changes to how we live, how we work, how we travel, consume, and interact. This is exactly the sense of urgency that we now need to build on.”
He added, “The business community has a very clear responsibility; it’s no longer profitability versus sustainability.”
To which the obvious retort is that if a business is not profitable it will not be very “sustainable” (whatever that infinitely flexible term may mean).
Perhaps it is unfair to mention that the Yara share was trading (in local currency terms) at NOK 422 on February 1, 2015, a level slightly higher than it is today, eleven years later.
Perhaps it is also unfair to note how Holsether was citing “societies’” response to the pandemic as some sort of model, a view shared by Akanksha Khatri, the lead author of a WEF report on the “new nature economy”:
COVID has shown us that we… are capable of making drastic changes…What’s required are decisive political will and leadership, as well as business innovation and acumen.
Needless to say, those “drastic changes” were a catastrophe. They should serve as a warning, not as a precedent.
Another clue of the sentiment that both existed and was being talked up in those times is the reference in the Financial Management article to ESG:
Institutional investors increasingly demand an accurate picture of companies’ environmental, social, and governance (ESG) and climate-related risks.
Some (too many) did and some did not.
And here’s Emiko Terazono of the Financial Times, writing in June 2021:
As fears mount over the environmental impact of the agricultural system, entrepreneurs are rushing to develop new ways to feed the planet’s growing population. Insects are rich in protein and other essential nutrients and can be reared at scale with minimal environmental impact…
[T]he buzz around insects is growing. VC funding to the sector has been creeping up since 2018, with $210m in equity investments last year, according to data group Dealroom. The largest flows have been to start-ups focused on feeding livestock, fish and pets…Rising environmental concerns and ESG investments as well as recent regulatory approvals have opened the door to larger-scale funding…
“More people are starting to think about the consequences of their behaviour,” said Kees Aarts, founder and chief executive of Dutch insect group Protix [https://protix.com/discovery-centre/tyson-foods-protix-join-forcesTyson Foods has since taken a stake in Protix]. He added that someone talking about sustainability 20 years ago would have been regarded as an anti-capitalist but now “most young people are thinking about it — I’m just blown away how they are looking at every possible solution to help reduce their footprint”…
“Consumers in the so-called west will have to embrace insects into their diets, to ensure their nutrition remains rich with essential amino acids, proteins, and essential micronutrients such as iron and calcium,” said Asaf Tzachor, a research associate specialising in food security at the University of Cambridge.
“So-called west.”
Okey-dokey.
It’s not hard to see that this was an era in which it was easier than it should have been for a company such as Ÿnsect to operate on the way that it did.
TechCrunch revisited the Ÿnsect story in an article by Anna Heim in late December. In it, she points out that its failure was not attributable to “the ‘ick’ factor that many Westerners feel about bugs. Human food was never its core focus.” Rather, its business was focused on “producing insect protein for animal feed and pet food, two markets with very different economics and margins that the company never quite chose between.” Indeed, as Heim explains, Ÿnsect’s management complicated matters further by acquiring Protifarm, a Dutch company raising mealworms for human food applications, “adding a third market to the mix.”
Heim:
Even as the company announced the deal, then-CEO Antoine Hubert admitted it would take a couple of years for human food to represent just 10% to 15% of Ÿnsect’s revenue.
“We still see pet food and fish feed being the largest contributor to our revenues in the coming years,” Hubert declared at the time. In other words, Ÿnsect was acquiring a company in a market segment that would remain marginal for years — at a time when the startup desperately needed revenue growth.”
Heim wonders how a company with little revenue was able to raise $600 million. To be fair, that might be less of a question had Ÿnsect been involved in cutting-edge technologies, but processing mealworms would have to wiggle very hard to be included in that category.
Heim rejects the idea that the explanation lies in “hype-driven crossover funds paying ambitious multiples during the 2021 funding frenzy,” a reference to the short-lived green bubble driven in part by ESG, an investment “discipline” marketed, at least for a while, as a way of reducing risk.
Instead, Heim argues, Ÿnsect “attracted impact-focused investors like Astanor Ventures and public investment bank Bpifrance that bought into a compelling sustainability vision.” But the reference to that “vision” suggests that green eyeshades were desperately needed. By itself, a “compelling sustainability vision,” is not enough to justify an investment unless that vision includes a credible pathway to a good financial return. If the purpose of an investment is to satisfy some public purpose, then different conditions apply, but that was not purportedly the case here. To put their decision in as most favorable light as possible, the investors drawn to Ÿnsect may have been attracted by the notion (to quote another ESG marketing line of the time), that they would do well by doing good.
Heim:
But [Ÿnsect’s] vision collided with market reality.
Oh.
Heim:
Animal feed is a commodity market driven by price, not sustainability premiums. In a perfect world, insect protein would be fully circular, with insects fed on food waste that would otherwise go to landfill. But in practice, factory-scale insect production typically ends up relying on cereal by-products that are already usable as animal feed — meaning insect protein just adds an expensive extra step. For animal feed, the math simply wasn’t working.
Oh.
And that was not all. In a December 2025 article, Agfunder News looked at Ÿnsect’s woes. It was not the only insect farmer to run into trouble. Others included a fellow French start-up, Agronutris (black soldier fly larvae), Canada’s Aspire Food Group (crickets), South Africa’s Inseco (more black soldier fly larvae, as well as larval skins and frass – insect excrement), and, back to the black soldier fly larvae, Denmark’s Enorm.
Agfunder News quotes Dr. Dustin Crummett, founder and executive director of the Insect Institute, who explained that these companies’ difficulties reflect “structural problem” affecting the entire sector:
Whether for human consumption, where insect acceptability remains low, or for animal feed, where insects cost 2 to 10 times as much as soy or fish meal, the sector struggles to become competitive.
Oh.
And at the Insect Institute’s website, the commentary is bleaker still:
While insect farming has been presented as a sustainable solution to meet global demand for protein, a growing body of research, including peer-reviewed academic research produced by the Insect Institute in collaboration with international researchers from other institutions, shows that the merits of insect farming have been exaggerated.
The Insect Institute cautions policymakers, investors, and other stakeholders to seriously assess whether insect farming will actually promote vital goals like environmental sustainability, animal welfare, and public health, rather than working to the detriment of other, more promising means of addressing the shortcomings of our broken food system. We support the development and implementation of appropriate regulations and best practices to govern insect farming moving forward, including scientifically-informed biosecurity protocols, welfare standards, and safety regulations concerning acceptable insect feeds. We endorse the role of alternative proteins and novel foods in addressing the shortcomings of our current food system, but we advise against classing farmed insects alongside alternative proteins which have realistic prospects of transforming our food system by competing with conventional animal products…
Oh.
Dr. Crummett, it turns out, is more of a plant man, but open to cell-cultivated meat too.
Those interested can read a peer-reviewed paper (Have the environmental benefits of insect farming been overstated? A critical review) on this topic here.
The abstract reads, in part, as follows:
Insect farming is frequently promoted as a sustainable food solution, yet current evidence challenges many environmental benefits claimed by industry proponents. This review critically examines the scientific foundation for assessing the environmental impacts of insect farming in both human food and animal feed applications. Our analysis reveals substantial limitations in existing research. Most studies have been conducted in small-scale settings, which may not accurately reflect real-world, industrial conditions. There are significant uncertainties, with many authors highlighting the fact that the future environmental impact of large-scale insect production is unknown. This is especially true given claims that insects can be fed on food waste and that insect frass can be used as fertiliser, both of which have considerable challenges to overcome at scale. Furthermore, insect-based foods predominantly substitute for plant products with limited environmental impact rather than meat, while evidence indicates that insect feed and pet food applications, when not utilising genuine food waste, generate greater environmental impacts than conventional alternatives…
Oh.
Of course, this is only one viewpoint — and it may be too pessimistic — but it is certainly one that raises questions about the role that insects have been assigned in shielding us all from planetary doom. Could it be time to revisit Soylent Green (I kid, I kid)?
But back, almost pointlessly it feels, to Ÿnsect’s efforts to survive. Heim relates that:
Pet food proved to be a different equation: It is less price-driven than animal feed and a far better market for insect protein, even with competition from other alternative proteins such as lab-grown meat.
Ÿnsect refocused its efforts toward the pet food sector in 2023, but it was too late.
Heim:
By then, Ÿnsect had already committed to a massive, capital-intensive bet that would ultimately doom the company. That bet was Ÿnfarm, a “giga-factory” in Northern France that the company billed “the world’s most expensive bug farm.” Built for insect production at scale, the facility consumed hundreds of millions in funding — money spent before Ÿnsect had proven its business model or figured out its unit economics.
Oh.
Companies and investments fail all the time, but I suspect that Ÿnsect would have more of a chance of success had those who ran it thought more about business and less about saving the planet. That harvesting insects may have less to contribute to that mission than once thought is just the frass on the cake.
The Capital Matters week that was . . .
Silver
This (and the fact that global silver demand has exceeded production for some years) almost undoubtedly explains why China (which has been stockpiling a lot of materials recently) is introducing export restrictions on silver from January 1 after a surge in exports in 2025. “This is not good,” posted Elon Musk. “Silver is needed in many industrial processes.”
Indeed.
Silver is used in a wide range of industrial applications, and if anything the 60-70 percent number understates just how dominant China’s position is. Recycling apart, most silver is produced as a byproduct of mining other metals, and thus “needs” processing. Only about 20-30 percent comes directly from silver mines as that term is popularly understood. If it came to a squeeze, the Chinese supply would not be easily replaced…
Neo-Prohibitionism
Variants of the original notion of passive drinking still surface, and may be signs of what is to come…
Regulation
In the year since the fire that destroyed 13,000 homes across Los Angeles County, precisely one house has been fully rebuilt and certified for occupancy. You can see a picture of it here. The home looks lovely, aside from the fact that it’s surrounded by burned-out empty lots. It is obvious that no construction has begun on any of them…
Fraud
Republicans ought to resist the temptation to make the Minnesota fraud story an immigration story, because that’s not what it is. It is a story that illustrates how lethargic and corruptible our public institutions have become. It’s a story about reckless public sector profligacy. It’s a story that encapsulates the pathologies that haunt the progressive mind. Republicans are well-positioned to tell this tale in a way Americans can understand and appreciate…
The Debt
Managing ourselves out of this mess will be hard. In the 21st century, Americans will lose something. Our consumption Bacchanalia, already slowing, must end. Less American soda, fewer Japanese pickups, and, we have been told, fewer dolls. Yet no degree of tariffs will reverse our sovereign debt trajectory. Total public debt outstanding in the U.S. is already $38 trillion, and it’s rising by about $2 trillion per year. Somehow, some way, we must cut borrowing. Ultimately, that pits our overseas military commitments against our domestic safety nets….
California’s Wealth Tax
In California, a proposed referendum to enact a “Billionaire Tax Act” looks likely to make the ballot in November 2026. If approved by Golden State voters, the act would introduce a one-time tax of 5 percent on all individuals with a net worth of at least $1 billion. Advocates of the tax, such as Representative Ro Khanna (D., Calif.), argue it is necessary to offset federal cuts to Medicaid, and hope to use the revenue from the tax to improve funding for education and food assistance programs. But as noble as those goals may be, the California wealth tax would be, despite the stiff competition, arguably the most destructive wealth tax ever implemented anywhere in the world…
“The Warmth of Collectivism”
[Mamdani’s] words reveal him to be either an idiot, a subscriber to a cult, or a cynical demagogue.
The idea that New York is a city where Rands and Roarks rule the roost is about as credible as the notion put about by collectivists of left and right that our economy is one where “market fundamentalism” prevails, so cynical demagogue looks like the best bet.
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