Ripe.io, a startup using blockchain technology to ensure traceability and transparency in the food supply chain, has raised $2.4 million in seed funding in a round led by the venture arm of global container logistics company Maersk. Relish Works, a food service company-backed innovation lab, also invested.
Ripe.io creates what it calls a “digital bridge” between farmers, distributors, processors, traders, restaurants, grocers, and consumers to record and share data on aspects of food’s journey from farm to fork. These data vary from the origin, the growing conditions, transportation, and the contents of packages to provide certified information about the quality and safety of food.
The startup was founded in early 2017 by two fintech entrepreneurs who worked with blockchain technology in various financial markets including FX and capital markets.
The blockchain is a technology that stores and communicates data to various parties via a secure and fully recorded ledger. Once an entry is made, it’s marked with a unique hash code that places it sequentially in the ledger.
While blockchain is a key component of Ripe.io‘s service, the company’s IP is the technology built on top of it, which includes its methods of data capture from the various parts of the supply chain using the internet of things. This includes capturing data from sensors on the farm, manual farmer surveys, uploaded spreadsheets and more.
The startup’s founders, Raja Ramachandran, CEO, and Phil Harris, president, learned a lot about ensuring the quality of the data captured from their time working in the financial industry.
“You’d be surprised about how much data scrubbing and management goes on the financial sector; there is so much data in financial transactions and they’re very complex,” Ramachandran told AgFunderNews.
“We’ve taken data from very different markets, from open outcry to telephones to highly efficient automated mechanisms, we have seen a mishmash of different parties that are very fragmented with no orderly communication, and we’re comfortable in that world; we’ve done it,” added Harris.
There are three main ways the company looks to ensure data quality:
Get as close to the originating source of the data as possible, understanding the difference between origin and authenticity, and the location of the data source
Take data in any form. “Our experience with our early customers helped us to develop the requirement to have a tech platform that allows us to capture data in any way,” said Ramachandran.
Ensure the data are shared — bar any marked for privacy — between all relevant parties so they can validate them and reach a consensus. This includes ensuring an agreement from all parties before any data point is changed.
“The procedures we set and the nature of the closed environments we create [which Ripe.io call their ‘Food Bundles’], where the participants have shared ledgers and knowledge of the others, creates a level of data voracity that we believe to be true,” said Ramachandran.
While adoption of Ripe.io’s “blockchain of food” will require some behavior change, this will be easier when the supply chain sees the benefits, argued Ramachandran.
“On the farm side, it could help farmers to increase their sales and pricing while on the other end big companies on the buyer side like Walmart want to look at risk management as well as providing more information to their consumers,” he said.
The depth of data Ripe.io is collecting could also be able to tell its customers why a tomato is sweet or when the right time to harvest and ship an avocado is to ensure perfect ripeness in the store.
“It is still very early stages before we can answer if it’s going to disrupt and affect behavior change, but we’ve seen significant changes already and the potential for change, but we’re not in it for change itself; it’s about improving the quality and transparency of the food chain- that’s our positioning.”
Currently Ripe.io is working with clients on a project basis with a software-as-a-service, but in the long run it will evolve into a licensed API and offer a transactional product.
Gaining investment from Maersk will play a big role in achieving its goals, Harris told AgFunderNews.
“When we looked at raising money and solidifying partners of significance, they needed to align with our philosophical foundations: that the supply chain of food is inefficient and could do with improvement to reduce the negative side effects and impacts, such as around the issue of food waste. And we wanted to find someone who could accelerate our journey. Maersk moves food around the world and their investment gives us unbelievable wisdom and guidance; their global network is one a kind and can help us globalize our story.”
The startup will use the proceeds mainly to increase its team.