The Smart Intech(Insect-tech) Company targets animal & pet nutrition with $3.4Mn seed funding.
In conversation with Ankit Alok Bagaria — CEO of Loopworm, the IBLoT team explored the various aspects of the Innovative Insect tech startup that treats insects as unused bioresources in improving the food biosystem.
By leveraging the untapped potential of Insect technology, Loopworm carves out a unique niche in the market.
Q. Tell us about the loopworm. What does the name mean, and what does it say about your company?
It is about basically creating sustainable ingredients for various industries with the help of worms, and insects. Loop signifies sustainability and we are establishing sustainability with insects. We are trying to build a business around the use of insects and processing them with the help of bio-manufacturing and biotechnology so that we can extract valuable products from them for several industries.
Loopworm, the Bangalore-based startup offers four variations of their major products, each providing high-quality nutritional benefits for livestock, fish, and pets.
This highly organic by-product is often considered post-harvest waste (annually 1.3 billion tons) have been converted to a new market, which can be used as nutritional feed for animals.
#1 LOOPGRUBS: Whole dried Silkworm Pupae (Slow Dried — Solvent-free extraction)
#2 LOOP OIL: Silkworms (Solvent-free extraction)
#3 LOOPMEAL OMEGA: Protein & Lipid Concentrate from Silkworms (Solvent-free extraction)
#4 LOOPMEAL PRO: Defatted Silkworm Protein(Solvent-free extraction)
Q: Loopworm was started in 2019, right after you finished your integrated course from IIT Roorkee. Can you tell us why you chose insect technology or waste regeneration from insect technology?
Ankit Alok Bagaria: Being an entrepreneur was always clear. My co-founder and I were very enthusiastic about starting up.
This is our second startup, so we both had failed startup experiences before, during our college days. It was an obvious choice for us because we didn’t want to get into the job world or go for further education.
Entrepreneurship teaches you many things that conventional education cannot because you’re always dabbling between different verticals, trying to figure out things without a fixed structure. Every entrepreneur has their journey, which is what triggered the entrepreneurial spirit in both of us.
“The earlier you start, the better it is.” says Ankit Alok Bagaria.
The trigger moment for Loopworm came when we came across a United Nations report that mentioned insects can be upcycled for food and feed.
The report highlighted that insects thrive in tropical climates, which India has. Different species of insects can consume various types of organic biomasses, such as crop residues, food waste, slaughterhouse byproducts, and food processing industry byproducts.
These insects are nutrition-dense, containing high-quality proteins and fats that can be utilized for different products. This insight motivated us to explore insect agriculture, given India’s large population and significant waste generation. Initially, we were not clear on what exactly to do with insects, but we believed insect agriculture had a large scope. Gradually, we focused on developing valuable processes and disruptive technologies to value-add insects for different industries.
Q: You mentioned that you had failed startup experiences during college. Can you tell us more about those experiences? How many or what were a few ideas that you failed at before thinking about the ideation of Loopworm?
Ankit Alok Bagaria: It wasn’t a lot of failed startup experiences. I started something called AGROSNAP with a couple of other friends, not with my current co-founder. We were developing a precision agriculture device using multi-spectral imaging. The technology was good, but we didn’t think through the business model, or how to operate or generate revenue. We were not up to speed with the financial and business aspects, which led us to pull the plug on Agro Snap.
My Co-founder Abhi Gawri had a startup called KENDO in the B2B supply chain space, aiming to bridge the information gap in the textile supply chain. However, with interventions like GST and demonetization, things became chaotic for him. When we both met in 2017, we connected over the idea that waste management and Agritech, especially in the primary and secondary sectors essential for a developing country like India, would have great scope. We believed building something around these areas would have a high impact and be greatly needed by the industries we aim to serve.
Q: How did you generate seed funding? Did you use any particular means or resources, or did you get help from mentors and investors? How did you get introduced to them?
Ankit Alok Bagaria: When we started Loopworm, we knew that getting capital wouldn’t be easy. We first targeted multiple grant funds. Different ministries have small grants that help build your proof of concept (PoC) and move beyond the ideation stage. For industries like ours, which are not typically attractive to conventional investors, it’s important to develop minimum viable products and POCs(point of contact) before seeking larger capital. Our approach was to target smaller grants and funds instead of immediately pursuing equity capital. We did not do a friends and family round but it can also be a viable option for setting context for future investors.
The first three years were sustained with grant money from various sources, small amounts, but enough to keep us going and reach a stage where we felt confident to raise scale-up capital for commercialization. In September 2022, we received our seed funding from Omnivore and WaterBridge Ventures, along with a few marquee angel investors. This funding helped us build an insect processing facility, develop an R&D team, and focus on commercial markets. We initially targeted the animal feed industry because insects are natural food for fish and birds, which made it easier for the market to accept our product. This market has fewer regulatory barriers and a high volume orientation, making it our initial focus area. We are also developing products for plant nutrition, cosmetics, and nutraceuticals.
Q: How is your product being accepted in the Indian market, given that it is a novel product? How do you tackle the challenge of creating a new market for it?
Ankit Alok Bagaria: The acceptance of our product in the Indian market follows a conventional B2B process. We develop and stabilize the product’s quality, conduct detailed testing, and engage in test marketing with potential customers. B2B customers often conduct internal audits to check the product’s quality consistency and the vendor’s production capacity. They consult in-house experts or external consultants before giving the go-ahead based on the results.
Once we started to receive positive feedback and repeat orders, we knew the product was working. In terms of product performance, our protein concentrate has more than 60% protein, with some variants exceeding 70%. It contains essential amino acids, has high digestibility due to lower ash content, and includes microbial peptides that boost immunity in farmed produce. Our insect fat oil acts as a palatability agent with a unique smell that attracts farmed species, encouraging them to eat more and increasing their productivity and immunity. These qualities make our product stand out compared to traditional feed ingredients.
Q: What are the main challenges you face as the founder of Loopworm, and how do you address or plan to address them?
Ankit Alok Bagaria: The main challenges include building a robust commercial angle and justifying the capital we’ve raised by ticking all the committed boxes. We are early in our commercialization journey and focused on establishing stable revenue streams and building long-lasting customer relationships. On the R&D side, the challenge is the time to market. We have developed lab-scale products and are now verifying these processes at a pilot scale, often needing to tie up with organizations with the necessary equipment.
Once pilot processes are set, we conduct trials, establish product use cases, and determine ballpark pricing before speaking to potential customers and doing test marketing. Protecting our technologies through IP and deciding the right geographies for filing patents is also crucial. We must also plan our future fundraising carefully, ensuring the timing, ask, and terms are right for both investors and the company.
Q: Are you planning to scale up and expand your territory to other regions in India or abroad?
Ankit Alok Bagaria: Yes, as an ingredient manufacturer, we aim to reach out to anyone and everyone who can use our product. The animal feed industry is vast, and our strategy is to first target the Indian market, especially the shrimp feed segment with our protein powder and the poultry feed segment with our fat oil. After establishing ourselves in India, we plan to expand to Southeast Asian markets and then go global.
Q: How do you ensure regulatory compliance from end to end in your supply chain, given the importance of adhering to regulations in the feed industry?
Ankit Alok Bagaria: Ensuring regulatory compliance involves multiple checkpoints. We have a team that ensures quality at the farmer’s end. Once we receive the material from producers, our quality control team conducts a quick one-day testing. If the quality meets our standards, we proceed with processing; if it’s manageable but not optimal, we assess whether we can still extract value. If the quality is too poor, we return it to the producer. This process ensures regulatory compliance and maintains our product’s high standards and is governed by contractual terms we have with our suppliers.
Q: How do you maintain the quality of your products after receiving the raw materials?
Ankit Alok Bagaria: After the initial quality check, we proceed with processing the materials. Maintaining cleanliness in our facility and conducting planned maintenance for our machinery is crucial for producing a consistent quality product. Consistency in quality is vital for the success of our products in the market. If we don’t offer consistent quality, our products won’t sell, so it is in our best interest to adhere strictly to regulatory standards and maintain high quality throughout our processes.
Q: Can you share any new products or launches that your company is planning for 2024?
Ankit Alok Bagaria: We have a new product in the pipeline, but it won’t be launched in 2024. We are currently in the pilot scale optimization stage for developing plant-based biostimulant ingredients. These biostimulants, specifically amino acid biostimulants, will be supplied to agrochemical or crop nutrition companies. They will be used as foliar or drench solutions on crops to enhance growth, productivity, stress resilience, and quality. Throughout this year, we will focus on technology development and achieving production consistency. Next year, we plan to conduct trials and test marketing, with a probable timeline for commercialization around 2026.
Q: Can you share any customer success stories or testimonials highlighting your product’s impact?
Ankit Alok Bagaria: As we operate in a B2B space, our testimonials are reflected in repeat orders from customers. We do not get direct testimonials since our products are not consumer-facing. Our ingredients are part of a larger feed formulation, and the overall effectiveness depends on the skills of the feed manufacturer and their formulation experts. However, the consistency in quality and pricing we offer results in ongoing partnerships and repeat business, which serves as a testament to our product’s reliability and value.
Q: How do you evaluate your company’s performance and progress?
Ankit Alok Bagaria: We have a very structured approach to evaluating our performance. My co-founder, Abhi, and I have divided our verticals and worked with respective teams to set daily activities, weekly targets, and monthly goals. This helps us push ourselves and our teams to achieve maximum productivity within specified timelines. We reflect on our progress regularly, replanning and adjusting our targets as necessary to ensure continuous improvement and alignment with our overall business objectives.
Q: What are the essential technical skills or knowledge an entrepreneur should have?
Ankit Alok Bagaria: An entrepreneur needs a high-level understanding of the entire value chain in their industry. It’s important to be well-read and continuously update oneself on industry trends, customer needs, and technological advancements. If an entrepreneur is passionate about a particular sector, they should understand it deeply from both an operational and technological standpoint. Additionally, an entrepreneur should adopt a problem-first approach, identifying real-world issues that people are willing to pay to solve, and then develop solutions based on thorough research and industry knowledge.
Q: Do you think something is missing in our academic systems that could better prepare aspiring entrepreneurs?
Ankit Alok Bagaria: Yes, I believe there is room for improvement in our academic systems. Introducing courses on entrepreneurship, intellectual property, finance, and commerce at the undergraduate level could be very beneficial. These subjects would provide students with a foundational understanding of business and innovation, helping them think critically and strategically about solving real-world problems. Such courses could be integrated into the general curriculum in the first year of a bachelor’s degree, providing an early introduction to these crucial aspects of entrepreneurship.
Q: When you encounter challenges, where do you go for guidance or answers?
Ankit Alok Bagaria: I rely on a network of mentors, advisors, and senior entrepreneurs for guidance. They serve as sounding boards, sharing their experiences and asking difficult questions that help me think through problems. Additionally, our investors, who are partners in our journey, provide valuable insights based on their extensive experience with startups. While mentors and advisors do not always have all the answers, their perspectives help us structure better solutions to the challenges we face.
On an ending note, LOOPWORM together aims to epitomize the synergy between academic knowledge and practical mentorship.
By harnessing the insect technology, they aim to parallelly achieve
i, United Nations sustainability, responsible production goals, Insect waste upcycling
ii, Increase the income of agriculture, poultry, and fish-rearing farmers
iii, Create a market & Value addition to Insect rearing.
With all of these aligned targets, Loopworm has the potential to become a mainstream startup also making its founders Alok and Ankit the FORBES 30 under 30 icons of 2023.
Team IBLoT wishes Loopworm its best for its future milestones and greater achievements.
