All posts in “Supply Chain”

TruTag raises $7.5 million Series C for tiny, edible barcodes that can be placed on pills, food and vaping systems

TruTag Technologies, a company that creates microscopic, edible barcodes to authenticate medications, food, vaping pods and other products, has raised a $7.5 million Series C. The funding, led by Pangaea Ventures and Happiness Capital, will be used to further commercialize its technology and develop new solutions.

Along with earlier rounds, this brings TruTag’s total funding to $25 million. Its clients include PwC, which uses the company’s technology in its Food Trust Platform quality assurance program for Australian beef exports.

A high magnification of TruTag particles, each of is an edible “chip” that authenticates the product it is applied to.

A high magnification of TruTag particles, each of is an edible “chip” that authenticates the product it is applied to.

Called TruTags, the company’s tiny barcodes are made out of nano-porous silica, a material that has received GRAS (generally recognized as safe) notice from the U.S Food and Drug Administration, and can be placed directly on products or in packaging to track it through the supply and logistics chain.

TruTags are used with hyperspectral imaging technology, which is able to process much more wavelengths than other imaging methods, so it can collect more precise and detailed data from an image. When scanned, the barcodes provide information about where a product was manufactured, lot numbers, authorized distributors and safe use.

In email, TruTag chief executive officer Michael Bartholomeusz, who holds a PhD in materials engineering from the University of Virginia, told TechCrunch that the company sees the most growth opportunities in industries, such as pharmaceuticals, nutraceutical foods and cannabis, that deal with counterfeit products from the black market or the “grey market,” including products from unauthorized suppliers.

A conceptual photo of TruTags' technology.

A conceptual photo of TruTags’ technology.

“TruTags material is an already approved excipient in pills by the FDA. Pharmaceuticals and food comprise a very large portion of the global counterfeiting problem, and given the very unique edible feature of TruTag’s solution, this is a core area of focus for the company,” he says.

For example, the technology can be used to lock vaping systems so they only work with authentic vaping pods, helping reduce the number of counterfeit pods on the market. Bartholomeusz adds that TruTags is close to coming to market in the CBD space.

TruTags’ ability to be placed directly on products, its edibility and instant authentication in one to five seconds differentiates it from other solutions. Bartholomeusz notes that other quality assurance tech include specialized symbols, inks and holograms, though many of those products have the disadvantages of being replicable by high-quality printers or relying on consumers’ ability to recognize them.

In a press statement, Matthew Cohen, director of technology at Pangaea, which focuses on investing in advanced materials technology, said “Pangaea is excited to partner with TruTag and help the company expand its team and product portfolio. We believe TruTag’s edible barcode technology will help increase consumer confidence and ultimately save lives. TruTag is making our world better by utilizing compelling advanced materials and advanced material process innovations to combat rising problems such as drug counterfeiting.”

Lab-grown meat could be on store shelves by 2022, thanks to Future Meat Technologies

Are consumers ready for meat grown in a lab?

Companies like Memphis Meats, Aleph Farms, Higher Steaks, Mosa Meat and Meatable are all trying to bring to supermarkets around the world meat made from cultivated animal cells, but the problem has always been the cost. 

Now, Future Meat Technologies has raised $14 million in new financing to build its first pilot manufacturing facilities to bring the cost of production of a cell-made steak down to $10 per pound — or $4 if the meat is combined with plant-based meat substitutes.

The $10 price tag is a whole lot lower than the $50 target that experts from the Good Food Institute were talking about back in April of this year — and represents a significant cost reduction that makes lab-grown meat a potentially commercially viable option much sooner than anyone expected.

“With this investment, we’re thrilled to bring cultured meat from the lab to the factory floor and begin working with our industrial partners to bring our product to market,” said Rom Kshuk, the chief executive officer of Future Meat Technologies, in a statement. “We’re not only developing a global network of investors and advisors with expertise across the meat and ingredient supply chains, but also providing the company with sufficient runway to achieve commercially viable production costs within the next two years.”

Unlike its other competitors, Future Meat Technologies doesn’t have any interest in selling its products directly to consumers. Rather, the company wants to be the supplier of the hardware and cell lines that anyone would need to become a manufacturer of lab-grown meat.

In a way, it’s not much different to the approach that Tyson Foods — an investor in Future Meat through its venture capital arm — has taken with farmers. Tyson contracts with poultry farmers to raise the chickens that the company slaughters and processes, and provides them with the means to raise the chickens for slaughter.

Future Meat production module

Future Meat production tanks for meat and fat

The secret to Future Meat’s success is its use of undifferentiated fibroblast cells that can be triggered with small molecules to turn into either fat cells or muscle cells. Once the fat and muscle starts growing, they’re placed in a culture with a specific resin that removes waste materials that have been an impediment to growth at large scales, according to chief science officer and founder Yaakov Nahmias.

While Future Meat doesn’t rely on fetal bovine serum to grow its meat products, it does use small molecules derived from CHO cells (Chinese hamster ovaries), which are used in new medical research and drug manufacturing.

We have a specific resin to remove the toxins from the media and that allows the cells to continue to grow,” says Nahmias. “It is essentially a new bioreactor design… you can increase the yield to 80%.. For every liter of medium you don’t get 100 grams of biomass you can get 800 grams of biomass… [and] you don’t talk about mega $100 million factories.” 

Nahmias says using a refrigerator-sized bioreactor, a manufacturer could get about half a ton of meat and fat in about 14 days. In about one month, growers can make an amount of meat equivalent of two cows’ worth of meat (a cow takes about 12 to 18 months to raise for slaughter).

The former Hebrew University of Jerusalem professor first began thinking about the lab-grown meat business while on sabbatical. “It was at a Peet’s Coffee right next to the Charles River in Cambridge,” Nahmias recalled. “Somebody asked me what I thought about cultured meat… They asked me what I thought about it and I told them it was the stupidest idea I had ever heard in my entire life.”

Growing cells is expensive, Nahmias said at the time, and the fact that the organisms basically grow in their own excrement means that they can’t reproduce effectively to reach any kind of large scale. That’s when Nahmias had his “Eureka” moment. “You need cells that grow without any growth factor at all,” says Nahmias. “The only cells that can do that are the least differentiated cells, which are fibroblasts.”

With the new financing from investors — including S2G Ventures, a Chicago-based venture firm (and an early investor in Beyond Meat); Emerald Technology Ventures, a Swiss investment firm; Tyson Ventures (one of the most active strategic investors); and Bits x Bites (a Chinese investor in food and agriculture startups) — Future Meat can now test its business model and manufacturing capabilities at scale.

Future Meat leadership

Future Meat leadership, Dr. Moria Shimoni, EVP of R&D; Yaakov Nahmias, CTO and founder; and Rom Kshuk, CEO

“You’re either growing fat or you’re growing muscle of a specific species,” says Nahmias. “Imagine a large truck going to that facility. [It’s] replacing the meat packing plant. From there the biomass goes through a process like extrusion. You can have thousands of these mass producing units. [It’s] going to a central facility where the meat comes out at the end. What we are doing is looking for parity and cost.”

For Nahmias, the fat’s the thing that brings the flavor for everything. “The fat gives you the aroma and the distinct flavor of meat,” says Nahmias. “This is the missing ingredient in Impossible Foods and Beyond Meat .”

Nahmias envisions products that are made using a combination of Future Meat’s lab-grown products and plant proteins that can approximate the full flavors of beef, chicken or lamb (all meats that the company says it is working with).

All Nahmias wants is for Future Meat to get to market; the founder doesn’t care whether that’s under Tyson’s brand or anyone else’s. “I want to be the largest company you’ve never heard of,” says Nahmias. “I want to make a product that is more sustainable and more cost-efficient, and is better for everybody.”

Like all of the other companies pursuing alternatives to animal husbandry, Future Meat, which was only founded last year, has a mission to reduce the environmental impact of meat eating. The company argues that its manufacturing model will reduce land use by 99% and emit 80% less greenhouse gas than traditional meat production.

“This continues our investment in Future Meat Technologies, which is focused on disruptive technologies related to our core business,” said Amy Tu, president of Tyson Ventures, in a statement. “We are broadening our exposure to alternative ways of producing protein to feed a growing world population.”

Ultimately the goal is getting to cost parity with regular beef. The company thinks a hybrid product could be $3 to $4, while the 100% biomass product would be roughly $10.

“We’re taking a yes and ‘Yes and’ as opposed to an either-or approach to the space,” says Matthew Walker, a managing director at S2G Ventures. “You will have animal-based meat, plant-based meat and you will have hybrid products. It’s more about the supply chain and the technological products that would bring this product to market. We think there’s room in the market for somebody to play that role.”

Nahmias and Kshuk think that’s the role Future Meat Technologies was born to play.

Reefknot Investments launches $50 million fund to invest in logistics and supply chain startups

Reefknot Investments, a joint venture between Temasek, Singapore’s sovereign fund, and global logistics company Kuehne + Nagel, announced today the launch of a $50 million fund for logistics and supply chain startups. The firm is based in Singapore, but will look for companies around the world that are raising their Series A or B rounds.

Managing director Marc Dragon tells TechCrunch that Reefknot will serve as a strategic investor in its portfolio companies, providing them with connections to partners that include EDBI, SGInnovate, Atlantic Bridge, Vertex Ventures, PSA unBoXed, Unilever Foundry and NUS Enterprise, in addition to Temasek and Kuehne + Nagel .

Dragon, a veteran of the supply chain and logistics industry, says Reefknot plans to invest in about six to eight startups. It is especially interested in companies that are using AI or deep mind tech, digital logistics and trade finance to solve problems that range from analyzing supply chain data and making forecasts to managing the risk of financing trade transactions. Data from Gartner shows that about half of global supply chain companies will use AI, advanced analytics or the Internet of Things in their operations by 2023.

“There is a high level of expectation from vendors that because of technology, there will be new methods to do analytics and planning, and greater visibility in terms of information and product, materials and goods flowing throughout the supply chain,” says Dragon.

Reefknot will also establish a think tank that will work with industry experts and government organizations on forums, research and exploring new logistics and supply chain business models that startups can bring into fruition.

YC-backed Eden Farm wants to cut out the middlemen between farmers and restaurants in Indonesia

Eden Farm is a startup with the ambitious goal of building a food distribution network for Indonesia, where many restaurants currently rely on markets for fresh ingredients.

But this means high markups and unreliable supplies for restaurant owners and lower profits for farmers, co-founder and CEO David Gunawan tells TechCrunch. The company, part of Y Combinator’s current batch, wants to help both by simplifying the supply chain, ensuring stable pricing and reducing food waste. Eden Farm currently focuses on fresh produce and non-perishable items, but plans to expand its product line to meat and seafood, too.

The company launched in 2017 and now supplies produce from 60 farmers to more than 200 restaurants in six major cities: Jakarta, Tangerang, South Tangerang, Bekasi, Depok and Bogor. Eden Farm is currently raising an oversubscribed seed round. Gunawan says the target was originally intended to be $1 million, but has now increased to $1.75 million. Investors include Y Combinator and Everhaus.

Eden Farm started as a farm, but while talking to other farmers and researching the agricultural market, its founders realized there were many problems with food distribution in Indonesia.

“Every restaurant in Indonesia faces a huge problem with supply, stability and extreme price volatility,” Gunawan says. “Fruit and vegetable prices can go up and down around 30% to 50% every day. In peak season, for certain commodities, prices can go up 10 times, like chilis in the summer.”

Eden Farm tackles the problem of supply and demand with a mobile app that gives demand forecasts to farmers so they can plan their next harvests. Traditionally, farmers don’t sell produce directly to restaurants, Gunawan says. Instead, their harvest goes through several layers of middlemen before arriving at markets.

Eden Farm

Eden Farm working with farmers in Indonesia

Eden Farm is able to ensure price stability and also allow farmers to make more profit by purchasing produce wholesale from them. On the demand side, Eden Farm’s value proposition includes quality control. Before produce is delivered to restaurants, it is inspected and washed. Gunawan says restaurants typically have to dispose around 30% of the produce they purchase from markets, but Eden Farm has a 100% guarantee and will refund the price of any produce that is unusable. It also partners with two large markets in Jakarta to help supply large quantities of vegetables and ensure there are enough supplies during peak season. Gunawan says Eden Farm’s quality control can help save restaurants up to 50%.

Eden Farm wants to build a network similar to Sysco, the American food distribution giant, but it has to solve several problems unique to Indonesia.

“We are serving a very traditional industry. Farmers already have their own way of planting and their own culture, which has lasted for generations, and we’re trying to change that,” says Gunawan. “At first we didn’t know how to talk to them, how to convince them, but we learned a lot about how to pay respect to farmers. Every time we go to a village, for example, we know how to present, who to pay respects to, like the elders there. We have to do that before the elders will introduce us to the farmers in the area.”

The company currently handles about half of its deliveries in-house and uses third-party logistics providers for the rest. Most produce is sourced from farms close to where it is sold so it can be delivered in less than 24 hours, but Eden Farm goes farther for some vegetables. For example, potatoes are purchased from farms in Central Java, while carrots come from North Sumatra.

Eden Farm works mostly with small, traditional farms, but it also carries produce like lettuce and kale from hydroponic farms. After finishing Y Combinator, Gunawan says the startup will begin focusing on expanding into five new cities: Bandung, Surabaya, Bali, Medan and Malang. As its order volumes increase, the company will begin focusing on smaller markets, and once it hits 25,000 restaurants, expand into meat and seafood.

UK to toughen telecoms security controls to shrink 5G risks

Amid ongoing concerns about security risks posed by the involvement of Chinese tech giant Huawei in 5G supply, the UK government has published a review of the telecoms supply chain which concludes that policy and regulation in enforcing network security needs to be significantly strengthened to address concerns.

However it continues to hold off on setting an official position on whether to allow or ban Huawei from supplying the country’s next-gen networks — as the US has been pressurizing its allies to do.

Giving a statement in parliament this afternoon, the UK’s digital minister, Jeremy Wright, said the government is releasing the conclusions of the report ahead of a decision on Huawei so that domestic carriers can prepare for the tougher standards it plans to bring in to apply to all their vendors.

“The Review has concluded that the current level of protections put in place by industry are unlikely to be adequate to address the identified security risks and deliver the desired security outcomes,” he said. “So, to improve cyber security risk management, policy and enforcement, the Review recommends the establishment of a new security framework for the UK telecoms sector. This will be a much stronger, security based regime than at present.

“The foundation for the framework will be a new set of Telecoms Security Requirements for telecoms operators, overseen by Ofcom and government. These new requirements will be underpinned by a robust legislative framework.”

Wright said the government plans to legislate “at the earliest opportunity” — to provide the regulator with stronger powers to to enforcement the incoming Telecoms Security Requirements, and to establish “stronger national security backstop powers for government”.

The review suggests the government is considering introducing GDPR-level penalties for carriers that fail to meet the strict security standards it will also be bringing in.

“Until the new legislation is put in place, government and Ofcom will work with all telecoms operators to secure adherence to the new requirements on a voluntary basis,” Wright told parliament today. “Operators will be required to subject vendors to rigorous oversight through procurement and contract management. This will involve operators requiring all their vendors to adhere to the new Telecoms Security Requirements.

“They will also be required to work closely with vendors, supported by government, to ensure effective assurance testing for equipment, systems and software, and to support ongoing verification arrangements.”

The review also calls for competition and diversity within the supply chain — which Wright said will be needed “if we are to drive innovation and reduce the risk of dependency on individual suppliers”.

The government will therefore pursue “a targeted diversification strategy, supporting the growth of new players in the parts of the network that pose security and resilience risks”, he added.

“We will promote policies that support new entrants and the growth of smaller firms,” he also said, sounding a call for security startups to turn their attention to 5G.

Government would “seek to attract trusted and established firms to the UK market”, he added — dubbing a “vibrant and diverse telecoms market” as both good for consumers and for national security.

“The Review I commissioned was not designed to deal only with one specific company and its conclusions have much wider application. And the need for them is urgent. The first 5G consumer services are launching this year,” he said. “The equally vital diversification of the supply chain will take time. We should get on with it.”

Last week two UK parliamentary committees espoused a view that there’s no technical reason to ban Huawei from all 5G supply — while recognizing there may be other considerations, such as geopolitics and human rights, which impact the decision.

The Intelligence and Security committee also warned that what it dubbed the “unnecessarily protracted” delay in the government taking a decision about 5G suppliers is damaging UK relations abroad.

Despite being urged to get a move on on the specific issue of Huawei, it’s notable that the government continues to hold off. Albeit, a new prime minister will be appointed later this week, after votes of Conservative Party members are counted — which may be contributing to ongoing delay.

“Since the US government’s announcement [on May 16, adding Huawei and 68 affiliates to its Entity List on national security grounds] we have sought clarity on the extent and implications but the position is not yet entirely clear. Until it is, we have concluded it would be wrong to make specific decisions in relation to Huawei,” Wright said, adding: “We will do so as soon as possible.”

In a press release accompanying the telecoms supply chain review the government said decisions would be taken about high risk vendors “in due course”.

Earlier this year a leak from a meeting of the UK’s National Security Council suggested the government was preparing to give an amber light to Huawei to continue supplying 5G — though limiting its participation to non-core portions of networks.

The Science & Technology committee also recommended the government mandate the exclusion of Huawei from the core of 5G networks.

Wright’s statement appears to hint that that position remains the preferred one — baring a radical change of policy under a new PM — with, in addition to talk of encouraging diversity in the supply chain, the minister also flagging the review’s conclusion that there should be “additional controls on the presence in the supply chain of certain types of vendor which pose significantly greater security and resilience risks to UK telecoms”.

Additional controls doesn’t sound like a euphemism for an out-and-out ban.

In a statement responding to the review, Huawei expressed confidence that it’s days of supplying UK 5G are not drawing to a close — writing:

The UK Government’s Supply Chain Review gives us confidence that we can continue to work with network operators to rollout 5G across the UK. The findings are an important step forward for 5G and full fibre broadband networks in the UK and we welcome the Government’s commitment to “a diverse telecoms supply chain” and “new legislation to enforce stronger security requirements in the telecoms sector”. After 18 years of operating in the UK, we remain committed to supporting BT, EE, Vodafone and other partners build secure, reliable networks.”

The evidence shows excluding Huawei would cost the UK economy £7 billion and result in more expensive 5G networks, raising prices for anyone with a mobile device. On Friday, Parliament’s Intelligence & Security Committee said limiting the market to just two telecoms suppliers would reduce competition, resulting in less resilience and lower security standards. They also confirmed that Huawei’s inclusion in British networks would not affect the channels used for intelligence sharing.

A spokesman for the company told us it already supplies non-core elements of UK carriers’ EE and Vodafone’s network, adding that it’s viewing Wright’s statement as an endorsement of that status quo.

While the official position remains to be confirmed all the signals suggest the UK’s 5G security strategy will be tied to tightened regulation and oversight, rather than follow a US path of seeking to shut Chinese tech giants out.

Commenting on the government’s telecoms supply chain review in a statement, Ciaran Martin, CEO of the UK’s National Cyber Security Centre, said: “As the UK’s lead technical authority, we have worked closely with DCMS [the Department for Digital, Culture, Media and Sport] on this review, providing comprehensive analysis and cyber security advice. These new measures represent a tougher security regime for our telecoms infrastructure, and will lead to higher standards, much greater resilience and incentives for the sector to take cyber security seriously.

“This is a significant overhaul of how we do telecoms security, helping to keep the UK the safest place to live and work online by ensuring that cyber security is embedded into future networks from inception.”

Although tougher security standards for telecoms combined with updated regulations that bake in major fines for failure suggest Huawei will have its work cut out not to be excluded by the market, as carriers will be careful about vendors as they work to shrink their risk.

Earlier this year a report by an oversight body that evaluates its approach to security was withering — finding “serious and systematic defects” in its software engineering and cyber security competence.