Enterra Feed Corporation, a Canadian producer of insect-based feed ingredients, has secured equity from three new investors in a funding round led by ADM Capital.
ADM will back Enterra through Cibus, its debut agribusiness vehicle, in what marks the fifth deal for the fund. It is understood ADM is aiming to collect €500 million for Cibus, and the firm said it targets a final close before the end of the year.
The other two new investors in Enterra are PHW Group, a German poultry producer with €2.5 billion in annual revenue, and “a prominent Canadian family-owned investment group,” according to Enterra chief executive Geoff Gyles. They were joined in the funding round by Wheatsheaf Group, the food and agriculture investment holding of the UK’s wealthiest land-owning family, and venture firm Avrio Capital. Both were already investors in Enterra.
Financial details were not disclosed, and ADM declined to comment, but Enterra said the money would be used to build three new production facilities in Alberta (due to open in 2019), British Columbia (2020) and the US Midwest (2021) budgeted at $30 million each.
Founded in 2007, Enterra opened its first commercial production facility seven years later, after extensive trials. Using recycled pre-consumer food waste as feedstock, the company farms and harvests black-soldier fly larvae, which it then processes to make ingredients used by the aquaculture, pet food and poultry feed industries.
Enterra bills itself as the first company to receive regulatory approvals in the US and Canada for its insect ingredients; it is also allowed to export to all EU member states for use in aquaculture, with approvals for poultry and pig feed currently pending.
The company said its sales have tripled annually – without disclosing when – and noted they continue to show “strong growth” as feed producers look for sustainable alternatives to “resource-intensive” inputs like fishmeal, soybean meal, coconut oil and palm kernel oil.
ADM will host the investment under Cibus’s “early-stage” mandate, to which 10 percent of the fund is allocated. The rest is earmarked for investments in mid-market companies with an EBITDA greater than $3 million, which the firm will hold for four to six years with an IRR target of 20-25 percent.
Previous assets backed by the fund have included New Jersey-based vertical farming start-up Aerofarms, Spanish olive oil producer Innoliva, a 1,000-acre almond orchard in the state of Victoria, Australia, and Israel’s Rootility, a developer of root-focused plant breeding methods.
This quick capital deployment has run slightly ahead of the fundraising pace ADM was hoping for, with Cibus initially slated to hit final close in Q2 2018, Agri Investor understands. ADM declined to comment on fundraising.
Earlier this month, the Hong Kong-based fixed-income and agribusiness manager exited its Central Eastern European and Kazakhstan private equity business through a management buyout, with 16 former staff spinning out the unit, now dubbed CCL Capital, without the help of third-party investors.
In January, that subsidiary had invested $9.4 million in Aina Dairy Farm in Kazakhstan’s Akmola region through the CCL Kazakhstan Silk Road Agriculture Growth Fund.