arc-net

Arc-net Raises £2m for Food Supply Chain Traceability Using Blockchain Tech

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arc-net, a Northern Ireland-based supply chain security and analytics company, has received £2 million ($2.5 million) in funding from Dr. Richard Steeves, the founder of Synergy Health, and former UK Entrepreneur of the Year.   

arc-net CEO Kieran Kelly said that the cloud-based platform promise to bring complete traceability and authenticity to the food supply chain. The technology uses blockchain and DNA technology to enable food producers and retailers to assure customers of the provenance and authenticity of their products. He added that it already has a client list of some of the world’s largest food producers.

“The funding will be used to accelerate the growth of the business into markets that would have been previously been inaccessible to us,” Kelly told AgFunderNews.

Kelly has long had an interest in both the food and tech sector: his family owns their own meat business in Northern Ireland and he used to work as director of a global defense company that specialized in information security and cryptography (the practice of encoding private data algorithmically).

The real catalyst for the formation of arc-net, however, was the horsemeat scandal in the UK in 2013. During this year, food sold in UK supermarkets labeled as containing beef was found to contain horse meat that was undeclared or improperly declared. At a similar time, some beef burgers in supermarkets also contained pig DNA. The scandal resulted in the Elliott Review into the Integrity and Assurance of Food Supply Networks, which provided a framework for preventing food crime like this.

“This scandal and the findings of the report highlighted the strategic and joined up thinking that was needed — and sorely lacking — throughout the entire food supply chain,” he said. “arc-net was formed to address this gap in the market and deliver true full-scale traceability and authenticity.”

Kelly views arc-net as a unique company in Ireland with both the technology it’s using and the way it is being utilized.

“However, with 2016 being the year of food and drink in Northern Ireland, there has been a focus on how companies can ensure the quality of their food,” he said. “Companies are beginning to see the value in food traceability and this has led to a vibrant local startup scene.”

arc-net’s solution gives companies and brand owners the ability to have independent validation of their food quality.

“Our service also increases the information flow across the entire supply chain, which helps ensure authenticity, quality, traceability and compliance, based on blockchain technology,” Kelly said. “We see significant demand for what we have to offer and this investment will put us in a very strong position to capitalize on that.”

A blockchain is a database that maintains a continuously-growing list of ordered records called blocks. Each block contains a timestamp and a link to a previous block, and by design, blockchains are inherently resistant to data modifications retroactively.

Recent research has predicted that the food traceability market will be worth $14 billion by 2019 and there are a growing number of startups working towards introducing their own traceability solution for the food industry using blockchain tech such as FoodLogiQ and Provenance. And the large retailers are starting to look at using the technology internally, including US giant Wal-Mart, according to Bloomberg.

“What we have found in our market research is that current traceability solutions are still utilizing standard serialization models (e.g. GS1 standard barcodes),” Kelly said. “One of the things that makes our solution unique is our Unique Universal Identifier (UUID). Our identification code contains a cryptographic marker for every single product or item. This code uses digital DNA to enable items to be tracked across the entire supply chain. The platform becomes a host for data through the product’s lifecycle, allowing organizations to deliver enhanced product and consumer analytics.”

While he noted that blockchain technology is not a panacea for all technological ills and, like any tool, it is only as good as its application, it does represent an innovative method of ensuring trust.

“A blockchain can be a revolutionary tool for the food sector, as well as any other sector that relies on a complex supply chain,” Kelly said. “Through blockchain technology, organizations can identify all participants in the chain, and form a sequence of events into an immutable chain of custody. A blockchain is invaluable for brand protection—it provides transparency, security, and authenticity, helping to bring trust to an untrusted world.”

arc-net has offices in Edinburgh in addition to its Belfast base. The company currently employs 20 people and has plans to increase its team to 50 in areas such as development, data analytics, and sales & marketing.

Are you using blockchain technology in the food chain? Email Media@AgFunderNews.com

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