Food quality startup Intello Labs closes $5.9m Series A round from AgFunder’s GROW, others

India’s Intello Labs has secured ₹450 million ($5.9 million) in Series A funding. Saama Capital led the round, with AgFunder‘s GROW Impact Fund, Omnivore, Nexus Venture Partners, and SVG Ventures Thrive joining in. [Disclosure: AgFunder is the parent company of AFN.]

Founded in 2016, the Gurugram-based startup uses artificial intelligence to assess the quality of fresh fruits, vegetables, and cereals. Its range of computer vision and deep learning-powered tools covers software, hardware, and service provision.

Its mobile app, Intello Track, allows users to capture images of produce using their smartphone’s camera. It then grades the photographed produce based on color, size, and visual defects.

The startup’s Intello Sort device can sort multiple agri-commodities by quality on a single compact line, making it easier to segregate individual pieces according to requirements, and at a lower cost than would be typical.

Intello Pack lets packers keep a closer eye on produce quality before they dispatch to customers. Intello Deep is a handheld near-infrared spectroscopy scanner that can measure brix, pH, total suspended solids, dry matter, moisture, and pesticide residues.

The startup’s customer base includes growers, packers, processors, exporters, food service providers, and retailers. Dole, Ocean Spray, and Reliance Fresh are some of the big-name brands working with Intello Labs, which also counts several Chinese and Southeast Asian e-grocery platforms among its clientele.

Intello Labs’ co-founder and CEO Milan Sharma said the Series A funding will help the startup push forward with its international growth plans, “specifically [in] the US and across Asia Pacific.”

“There has been a significant spike in interest from these markets over the past few months, which was further accelerated by Covid-19, and now we have the firepower to go after these opportunities,” he added.

“This new demand combined with the stickiness of our existing clients validates the fact that our products bring much-needed transparency and standardization to fresh produce value chains.”

E-grocery, packaged foods demand rising

Sharma told AFN that the startup’s two biggest sources of new business in recent months have been e-grocers and packaged food processing companies.

The variety of specific requirements from these different types of clients presents Intello Labs with one of its key challenges, he said.

“Physical store grocers want to ensure display quality of produce is of a good standard, to have better quality perception among consumers, whereas e-grocers want quality to be [preserved during delivery] to minimize customer complaints or reduce refunds due to quality.”

To address this, the startup is looking to enhance its product and service offerings – particularly as it pushes into new markets in Asia and North America where customers’ demands and expectations are likely to diverge further.

“Supply and fresh produce consumption is different in different geographies. For example, durian is consumed and relished in Southeast Asia, however we won’t see much [durian] in other markets. Learning local supply chain and adapting to local pain points are some of the interesting challenges [we have],” he said.

“There is big push for complete automation of quality assessment from our clients, so our new products will specifically focus to cater to that need for automation.”

Find out more from Intello Labs on how Covid-19 is impacting fresh produce businesses globally here.

John Friedman, Asia director at AgFunder and investment director at GROW Accelerator in Singapore, said that Intello Labs had been “a great addition to our inaugural GROW cohort, and we’ve really enjoyed being part of their journey and growth over the past year.”

“What really sets these guys apart is the scalability of their tech and ability for customization – it literally puts the power of much larger systems into the palm of your hand,” he added. “Solutions to improve transparency and quality control along the supply chain and, ultimately, reduce food waste are critical if we are to move towards a more sustainable agrifood system for all. We look forward to seeing where Intello goes as they expand across Asia Pacific and beyond.”