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In December 2022, impact investor E Squared Investments participated in a follow-on funding round with Nambu Group, an insect protein company founded by Allan Gray Fellow Founder, Lowell Scarr, that converts food waste into high-value protein feed for the poultry, pork, and fish farming industries as well as the exotic pets market-based in the Eastern Cape.
By 2050, the global population is projected to reach 10 billion people. Current food production systems will be unable to meet the growing demand and protein scarcity is a concern. Traditional protein sources such as soy and fishmeal may not be able to meet the growing demand. Insect protein offers a versatile and sustainable solution.
Lowell embarked on his Nambu journey ultimately to solve for the problem of food security for humans. He believes that soon we will need to be ready to face the huge environmental, economic and food security challenges head-on.
Although human consumption of insects has not received wide-spread adoption in the West, there are currently over two billion people in the world consuming insects as part of their diets.
Furthermore, insect protein is nutritionally superior to traditional protein sources and will have with long-term cost benefits.
Global demand for alternative proteins and oils is projected to reach 500,000 metric tons by 2030, primarily driven by the pet food and aquafeed markets.
The insect protein market is forecast to reach $4.6 billion by 2027, driven by initiatives to reduce greenhouse gas emissions and increased awareness of sustainable food sources.
Tshilidzi Matlala, E Squared’s Chief Portfolio Officer is excited about the opportunity to continue creating value in Lowell’s business, and says, “We are excited to augment our Nambu partnership for this next phase of the growing venture. Expansion at this stage makes a lot of business sense and we are confident of Lowell’s ability to take Nambu to the next level whilst remaining committed to his vision.”
Nambu has been in the E Squared Ventures portfolio since 2020 and this seed round investment will be used to upgrade and expand their Black Solder Fly (BSF) production facilities, improving product sales revenues and increasing the sustainability of the business.
Lowell spent time researching the best insect to farm as a solution to waste processing and sustainability issues, one that would also be environmentally friendly and cost-effective. He chose the Black Soldier Fly because farming can be done on a large scale and produces a high protein yield.
BSF farming is an incredible solution to these problems in part because it is intensive and efficient – there is no need for great swathes of arable land or much water and the flies feed on the nearly inexhaustible supply of food and organic waste created by humans.
Whilst most consumers contemplate whether we are yet at the precipice of putting BSF pancakes on the menu at Bed & Breakfasts across the country which would be good news for any pioneering South African entovegans and entotarians, Nambu is focusing on improving the operational efficiencies for the provision of cost-effective and sustainable environmental solutions in food production by producing high-protein feed for domesticated animals, and nutrient-rich compost.
The United Nations Food and Agriculture Organisation estimates that up to 35% of food produced globally is wasted, placing a significant cost on economies and environments. Nambu has already begun providing waste management as a service but is looking to expand its capabilities to offer a sustainable and alternative recycling solution for businesses that generate significant amounts of food waste.
These industries include property management, retail groups, processors, and even municipalities. By utilising Black Soldier Fly farming methods, Nambu’s recycling process produces 50% less Carbon Dioxide Equivalent (CO2e) than traditional composting and landfill methods. This solution will not only help industries meet their environmental, social, and governance (ESG) reporting goals but also contribute to the effort to reduce waste disposal.
Nambu currently employs 23 people in a province that is renowned for having the country’s highest unemployment rate, sitting at 45.8% going into the third quarter of 2022 (Statistics South Africa). This deal and the subsequent expansion will mean almost doubling Nambu’s staff commitment this year. This alone makes the deal worthwhile for E Squared, which pays attention to the social impact of their investments and long-term commitment to responsible entrepreneurship.
But it does not end there. There is a net positive impact on the environment as expansion will allow Nambu to process up to 20 tonnes of additional food waste per day and thus in part creates an innovative solution to South Africa’s 10-million tonnes a year food waste problem; one-third of all food in the country (Worldwide Fund for Nature South Africa Report).
“We have built a business that is highly appropriate for the South African context which is at the root of our sustainability and success. Going into the new year with additional E Squared funding means that we can crystalise some promising engagements and expand without compromising our supply of high-quality feed or negatively affecting existing relationships and commitments. It also means that we can undertake R&D on further product offerings and process significantly more waste as part of our expanded waste management service,” says Founder and CEO, Lowell Scarr.
Nambu is making a significant impact in the food industry by unlocking the potential of insect proteins and alternative oils. This year, Nambu will take significant strides in expanding their circular system and positively impacting the entire food value chain. By offering a sustainable recycling service for businesses, Nambu addresses the pressing issue of food waste disposal at landfills and provides providing innovative solutions for recycling beyond composting.
Company Office is a subscription-based press office service.
E Squared was founded and launched in 2007, being set up as an Allan Gray BEE partner. We are an impact investor, with a focus on three forms of impact: job creation, value creation and ethical, responsible entrepreneurship.
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E Squared funds agribusiness with a strong focus on food security – Ventureburn
