Simon Hazell, the co-founder of the now-defunct insect protein startup Inseco, has resurfaced as the CEO of Bioshroom, a functional mushroom producer based in South Africa’s Western Cape.
The move marks a sharp pivot from high-volume industrial agriculture to the wellness supplement market, coming just months after Inseco ceased operations. Hazell’s return to the founder seat offers a case study in resilience within the volatile African hardware and deeptech ecosystem, where infrastructure challenges often derail capital-intensive projects.
Bioshroom, founded in 2022, is positioning itself as a premium supplier of medicinal mushrooms, capitalizing on a facility located in the Kogelberg UNESCO biosphere. The company is currently completing facility upgrades, with commercial production slated for January 2026.
The Mushroom Bet
Hazell’s move to Bioshroom aligns with a global surge in demand for adaptogens and functional fungi. In the US alone, sales of mushroom supplements jumped 75% in 2023, outpacing almost all other ingredients in mainstream retail.
However, the sector faces scrutiny regarding product consistency. Hazell says Bioshroom’s strategy relies on solving the supply chain opacity that plagues the current market.
“The challenge we’re addressing is around quality,” Hazell stated. “We’ve identified that there is a lot of variation out there, and we want to help brands get access to pure, responsibly cultivated functional mushrooms.”
The startup claims to use only fruiting bodies — rather than the mycelium-on-grain often used by competitors to bulk up weight — and issues independent certificates of analysis for every batch to test for heavy metals and pesticides.
Hazell has brought on Volant Wills, a manufacturing specialist, as COO to oversee the facility. The company is pursuing FSSC22000, Global GAP, and Organic certifications to secure export agreements, targeting the high-margin intersection of food, beverage, and pharmaceuticals.
The Inseco Crash
The backdrop to this new venture is the high-profile collapse of Inseco in October 2024.
Founded in 2018, Inseco was once the poster child for South African agritech. It raised a $5.3m seed round in 2022 — one of the largest in the region at the time — led by Futuregrowth Asset Management. The company bred black soldier fly larvae to convert organic waste into protein meal and oil, aiming to disrupt the aquaculture feed market.
Despite early success, including winning the Global Cleantech Innovation Program, the company was forced to sell off assets and close its doors last year.
In a candid post-mortem, Hazell cited a “perfect storm” of external infrastructure failures and internal strategic errors. The primary catalyst was South Africa’s energy crisis, known locally as “loadshedding.”
“The recurring four-hour power outages that went on for several months devastated operations,” Hazell wrote in a note to stakeholders. The outages caused temperature fluctuations in the insect colonies, disrupting breeding cycles and increasing energy costs fourfold.
Hazell admitted that the company had delayed purchasing a large generator to preserve capital — a decision he now calls “an expensive mistake.” By the time backup power was secured, the grid stabilized, but the damage to production consistency and investor confidence had already been done.
Beyond the power grid, Hazell acknowledged that Inseco suffered from typical hyper-growth symptoms.
“Loadshedding is not the only reason we failed,” Hazell admitted. “We made some bad hires. We scaled too quickly and pivoted too slowly.”
The company’s model relied on massive scale to compete with commodity prices like fishmeal. When production faltered, the unit economics collapsed. Inseco attempted to pivot toward higher-margin technology licensing and biological products, but the shift came too late to save the runway.
This narrative mirrors broader struggles in the insect protein sector. French unicorn Ÿnsect recently entered court-supervised restructuring, and Innovafeed has paused some expansion plans, suggesting that the capital-intensive nature of insect farming is proving difficult to sustain globally.
From Feed to Pharma
Hazell’s transition to Bioshroom suggests a strategic retreat from the low-margin, high-volume commodity game.
While Inseco required thousands of tons of output to become viable, the functional mushroom market commands significantly higher price points per kilogram. By focusing on extraction and high-purity cultivation in a controlled UNESCO biosphere environment, the operational risks are arguably lower than managing live insect colonies at industrial scale.
“I wanted to work in a sector that uses the skills and networks I’ve built over the years,” Hazell said of the transition.
Bioshroom’s first batches under the new leadership are expected to hit the market in early 2026. For Hazell, the venture represents a second chance to prove that hardware-based biotech can scale in South Africa — provided the lights stay on.