Attacking Food Waste:
FreshSurety’s technology converts any box, carton or bag into a “Smart Container”, a self-contained chemistry laboratory. Using this data we apply five proprietary algorithms to reveal the invisible state of perishable foods and natural/clean label ingredients allowing users to make an informed choice about their inventory and reduce waste.
Our Business Model: Make Freshness Sensors cheap enough to give away and sell freshness analysis.
Problem – Visually humans can’t determine the condition of perishable products and for Supply Chain managers decisions must be made on huge volumes of product at high velocity.
FreshSurety’s proprietary technology and algorithms answer three questions 1) How fresh are my stored perishable products? 2) How long will these products stay fresh? 3) Are there any problems with my stored perishable products? Simply by revealing the invisible, FreshSurety both decreases waste and keeps everyone safer. By measuring certain targeted chemical actors we report the current freshness condition of both food products and natural/clean label ingredients. We also predict a products future condition 6 days in advance.
For Supply Chain Managers our real-time analysis gives insight to the invisible state of foods and natural/clean label ingredients so managers can make an informed choice about their inventory and reduce waste. In real perishable supply chains our system increases Forecast Accuracy by 50%, boosts Actual Availability of Goods by 40% and halves Inventory Levels.
In the home our products works inside of refrigerators, measuring stored foods remaining nutrition so people can make better choices of when to best consume their foods based on its actual measured state. Also, our system alarms if Microbial Contamination is detected.
Our technology allows for automated real-time sampling of high risk perisiable stocks to a customer determined Acceptable Quality Level, AQL, at a 95% quality confidence level. Without FreshSurety technology only very low confidence level <10%, (meaningless) quality inspection plans are possible. Because these plans have limited value, they are simply not performed, rendering the condition of stocks invisible and dangerous.
Our technology has been demonstrated to successfully predict perishable freshness outcomes days in advance. Competing solutions based on time & temperature technology are only right 16% of the time. FreshSurety’s algorithms correctly label bad food as bad 99.3% of the time. Our end-to-end system reduces food waste by over 1.5 tons per million dollars of retail value for Supply Chains over 5 days long and allows for automated real-time sampling of perishable stock at a 95% quality confidence level. We have gathered the world’s largest machine learning/AI training sets of perishable foods and have made many food freshness discoveries previously unknown to science.
The scientists and engineers of FreshSurety have over 120 years of combined technical and business experience working on programs for defense customers and DARPA. We put our skills to work to create a new food freshness sensor that doesn’t require a degree in chemistry to use. Working with food economists we built a new end-to-end system that senses the freshness of perishable foods, working in real-time, automatically, 24 X 7 X 365.
Both of these industries have been taking off in the last decade, with an estimation that the global market for Biotech is going to surpass $775 billion within the next 4 years. These estimations coming off the backs of companies making substantial progress within the spaces of human organ growth, lab grown plants, as well as meat synthetics.
In 2017 the same market was valued around $96.4 billion, so the industry is looking at over a 7x growth within only 7 years.
Medtech companies are estimated to be valued in total around $200 billion by 2023 according to a report last year. The aging of the baby boomer generation as well as the rising prevalence of chronic diseases (6 in 10 Americans have one) are some of the key driving factors of this industry. The World Health Organization reports that by 2050 16% of the total world population will be geriatric, which means a giant demand for advancements within medical tech.
The rise of “tele-doctors” within the last 5 years is also new territory. This simple, yet effective, combination of video conferencing and mobile app technology has led to the rise of companies such as “ZocDoc”, which is currently worked over $2 Billion, providing early stage investors over a 100x return from their Series B round, and a 20x return from their Series C round.
Even companies as large as Apple have kept up with the trend in the last decade. The Apple Watch is marketed as not only a wearable for entertainment, but also because of the many health benefits that it offers alongside it. With built-in heart monitoring, moving tracking, and other features many people are are turning to this entry level medical device as a segue into the market.
One of the largest M&A acquisitions of 2019 was also directly in the BioTech/Med Tech space. Bristol Myers was acquired by Celgen for over $70 billion in early 2019, with many other $10b+ happening further in the year. This trend does not seem to be slowing down either. Forecasts for 2020 show that M&A within this space is expected to continue to increase of the next 5 years, as many of the larger BioTech/BioPharm companies are looking to acquire any new technology they can to continue to capture additional market share.
Investor interest within this space has grown exponentially since the early 2000’s, and right now there is actually a key role for Angel Investors to play within this market. Many of the larger venture firms are waiting to fund these companies until their later rounds (Series B/C), meaning that many of these MedTech firms are looking for debt raises, and Angel Investor raises to get them by in the meantime. What this means for a potential investor is that they will be able to get a much larger piece of these companies, and higher upside return, if they are able to identify prime targets early on.
This space can be hard to break into for a solo Angel Investor if you do not have the right network, but here at Newgate Capital, we screen many potential MedTech deals each year, and are always on the lookout for a great opportunity.
There is no doubt that these spaces are going to continue to thrive over the next decade, and any savvy investor should be looking to diversify a bit of their portfolio here.
The Financial Technology (FinTech) space has seen tremendous growth over the last decade. 10 years ago if you mentioned the word “FinTech” in a conversation you would have been met with blank stares. These days though, it’s one of the fastest growing sectors within early stage investing, and people cannot get enough of it.
In 2010 only $2 billion was funded towards FinTech companies, by 2018 that number had ballooned to $50 billion. To say that the space has exploded would be an understatement. It’s crazy to think that we live in a world today where technology as boring as a payment processor has become a household name. (Stripe / Square)
Even Apps such as Venmo have become so prevalent in today’s world that the company name itself has become a verb. The younger generations these days say, “Don’t worry I’ll Venmo you for it”, as a way of saying that they will pay someone for something.
The children that grow up today will never have to write a paper check in their life. If any type of financial service cannot be provided on their phone, they will not even think about accessing it, that is how prevalent FinTech has become over the last decade.
Startups aren’t the only ones that have been looking to take advantage of the growth of this industry. The incumbents (Banks, Payment Networks, Credit Providers) have definitely taken notice, and have been sometimes quietly, and other times not so quietly making moves to jump onto this movement. One of the most recent announcements of Visa acquiring the startup “Plaid” for $5.3 Billion caught everyone by surprise, and is a huge sign that the major players are looking to innovate, and innovate quickly.
A quick primer on Plaid
In their own words, “Plaid is a data network that powers the FinTech tools millions of consumers rely on to live healthier financial lives”.
In practice, Plaid is a business that created technology which allows users to connect their bank accounts to online FinTech services (Banks, Brokerages, Credit Cards, anything you can think of). For example, take the situation of you signing up for a new brokerage account. At some point during the process they are going to ask how you are going to fund the account, and most likely you will be doing this via an ACH transaction from your Checking/Savings account at your bank. What Plaid does is allow you to “sign in” to your bank with your normal username and password, and verify your bank account right on the spot. This all happens within seconds, and doesn’t require users to go through the hassle of the old way we used to link our banks up.
Does anyone else remember the old way we used to link our bank accounts to services? We used to have to wait for those two small < $1 deposits to hit our bank statements, and then log back into our accounts to confirm those deposits. It was incredibly annoying for all users, and it made the experience of signing up for new products terrible. Plaid is the reason that this process is basically non-existent these days.
Additional Plaid also offers software that allows developers of any application to use this technology that they have created for a small fee. This allows other FinTech startups to get off the ground running much faster than if they had to create this type of technology themselves.
For Visa, buying Plaid is something akin to insurance against disruption by other technologies that might enter the market. Visa is one of the largest payment networks on the planet, and has been used globally for decades. They have a strong presence and are not likely to go anywhere anytime soon, but they also know that if they do not innovate, that eventually they will be left behind. This purchase of Plaid is a huge step in the right direction for Visa in terms of innovation. Not only does this grant them the technology that Plaid offers for use within their own products, but also, and maybe even more importantly, it offers them direct insights into the FinTech startups that are using Plaid, and the all of the data collection that that brings.
This can help Visa more easily identify other trends within the payments industry as they arise, and catch onto those more quickly than their competition. I believe that with this move Visa has signaled to their competition that innovation is something they are truly pushing, and I believe that other players (Mastercard) will also feel the need to follow suit.
While this recent Plaid acquisition is one of the largest FinTech exits in a while, I have no doubt that it will be anywhere near the largest of the next decade. This is a space that is only going to grow exponentially in size. Technologies such as Blockchain, Artificial Intelligence (AI), and Internet of Things (IoT) are going to also have tremendous effects on this industry. I’m thoroughly excited, and will be keeping a close eye on where this all leads these next 10 years.