[Disclosure: AgFunderNews’ parent company AgFunder is an investor in FaunaTech through the AgFunder GROW Impact Accelerator, which is issuing a final call for applications to join its fifth cohort, which begins in April. The deadline is February 25.]
As FaunaTech cofounder Sidhant Jena observed a couple of years ago, the parallels between human and animal diagnostics were brought into sharp relief in the early days of COVID-19.
As governments and healthcare providers were frantically trying to set up the most efficient testing, tracing and isolation protocols to contain the spread of COVID-19, FaunaTech was applying the same thinking to dairy farms dealing with the ongoing challenge of mastitis.
An udder infection that leads to decreased milk yield, discarded milk, high treatment costs, and antibiotic use, mastitis costs dairy farms more than any other disease, says FaunaTech. But by the time cows start presenting visible symptoms, the damage is done, says the Bangalore-based startup, which is tackling the problem with a novel smartphone-based diagnostics platform for rapid testing of milk and bovine health at the farmgate.
FaunaTech CEO Rajat Pandya, who teamed up with Jena to create FaunaTech in early 2021, caught up with AgFunderNews (AFN) to discuss the value of early testing, the most efficient way to reach the market, and the ‘quantified cow.’
AFN: Tell us about the genesis of FaunaTech
RJ: My cofounder Sidhant Jena cofounded a business called Jana Care that had developed a mobile diagnostic platform in the human health space and we saw the possibility of creating something similar for animals, starting with the dairy sector.
Sidhant went to the US to study at Georgia Institute of Technology and at Harvard Business School before coming back to India to start Jana Care in Bangalore, which is the best location for biotechnology and diagnostics.
I met him through a common friend and in early 2021 we founded FaunaTech.
AFN: What problem is FaunaTech solving?
RJ: In India, the dairy market is still almost 50% unorganized. Most farmers are very small and might only have three or four animals, so that’s where we saw a big need for diagnostics at the farm gate, especially in the case of mastitis [a common condition affecting cows’ udders] where you want to test for it at the subclinical stage [before the cows are showing obvious symptoms].
What some farmers are currently using is the California mastitis test, which is convenient in that you take the solution [reagent] and mix it with fresh milk for 10-15 seconds and see if there is gel formation [if there is a high number of white blood cells, indicative of infection/injury, they will react with the reagent to form a gel] and a color change.
The problem is that it’s not very accurate if you’re looking for subclinical mastitis, plus you might see the results as dark purple but to me it looks navy blue, so it’s very subjective and you can get very high false negative results.
So right now, farmers can use a crude mechanism like the California mastitis test or they can send samples to the lab, which can take a couple of days and you can’t do it on a regular basis because it’s expensive.
There are benchtop models like the DeLavel cell counter, but they cost thousands of dollars and each test can cost $4-5, so what we see is that many farmers tend to find out that their cows have mastitis only at the clinical stage, which is really too late.
Without early testing, farmers only get to know there’s a problem when the SCC [somatic cell count] values [a high number indicates infection] are already beyond 1 million or 1.5 million whereas the threshold for good quality of milk is below 200,000. So there’s a need to detect mastitis at a subclinical stage between 300,000 to 700,000 SCC when farmers can’t visibly detect it because they don’t see any changes in the udder.
It’s only after you get to 1.5 million that they see swelling in the udder and the thickening of milk and they are forced to use antibiotics.
AFN: Explain the value of early detection
RJ: If you can identify mastitis at the subclinical stage, you can deal with it immediately, use fewer antibiotics and the cow is not out of the milk supply for so long.
Mastitis easily travels through the herd and as soon as farmers know there’s a problem, they have to pull out the infected animals and put them separately on treatment. Treatment costs are heavy and the loss in milk production is huge, 20 to 25 days of milking is lost for the farmer, so we’ve seen almost $100-$120 loss per animal per farmer in India.
If you detect it early, you’ll still have to keep the animals under observation for a few days and use medications—although not necessarily antibiotics—but you’re not going to lose 20+ days on the milking cycle. And when you’re talking about HF [Holstein Friesian] cows, when production can be 15-20 liters per day, that’s substantial.
AFN: How is FaunaTech addressing this problem?
RJ: Our patented portable device can connect up to a smartphone via bluetooth. It’s cheap, quick and easy to use but also gives highly accurate SCC readings in line with DeLaval Cell Counter tests within two minutes. You then buy test strips [that will vary depending on what biomarker is being tested] that change color [when added to fresh milk] and are read by the device.
Our system can be used by any farmer and it provides a quantitative reading, followed by guidance on the smartphone application on next steps regarding treatment.
If you look at ROI, the first benefit is decreasing mastitis cases. In our early deployments in India, we’ve seen a decrease in mastitis cases by 55% by just detecting early at the subclinical stage. The second is an increase in milk production, where we’ve seen a 22% increase just by early detection [so the cows are not out of the milk supply for so long]. Number three is a decrease in antibiotic use and in turn a reduction in antibiotic residues.
So all this lead to overall savings to farmers, especially on veterinary costs. If you detect at a late stage, you have to involve a veterinarian.
AFN: Talk us through your tech
RJ: We call it a closed loop animal health management platform. The chemistry is on the testing strips. The hardware reads the strip which is interpreted for the user on the mobile [smartphone] application, where the software is.
On your mobile, you will see the basic result of somatic cell counts and the basic reports, but once it’s connected with the dashboard on the cloud, that’s where you see all the data analysis and you can see detailed reports because we have time stamps and geo-tagging on all of our testing.
In the application, we’re also punching in farmer names, numbers, and animal IDs, so eventually, you will have at least eight columns on the dashboard, where you will be able to see the number of farmers, number of animals, and then a map that will be able to provide insights for veterinarians to see where spikes are happening and manage cases early on.
We have very strong IP for our hardware and the strip chemistry and we have filed patents for our platform, the device, the strips and the entire tech stack in India, Europe and the US so far.
AFN: What’s the business model?
RJ: So currently, what we’re working on is a very simple business model, the Nespresso model, where the device is a one-time purchase, and test strips can be purchased on a regular basis.
But we are not selling the device to farmers directly, which would be very inefficient. We are partnering with large dairy companies such as Nestlé, Lactalis and Parmalat, the big milk cooperatives such as Amul, and providers of veterinary services, because they work with farmers on a regular basis.
These big partners then provide our solution to the farmers that supply them at subsidized rates because it’s in their interests to keep the animals happy and healthy.
AFN: What else can your portable devices test for?
RJ: We started with the dairy sector when we launched commercially last year as we saw this huge need for SCC testing for mastitis, but we can also test for BHB [a good indicator of subclinical ketosis in dairy cows], LDH [another indicator of subclinical mastitis], antibiotic residue and other things such as A2 beta casein, calcium, zinc, and progesterone [to assess reproductive status].
But we also see a need for a host of other biomarkers, especially for fish, meat, poultry, and grains. We see a huge opportunity to test critical biomarkers such as histamine in fish, E. coli for meat and poultry, and aflatoxins and mycotoxins in grains.
Our focus is on tests where you currently need a benchtop or lab level test, and we can offer on-site portable testing. So now we’re in the early stage of development for testing E. coli for meat and poultry and histamine in fish. If the histamine levels go beyond a certain threshold, the fish is no good for human consumption.
The beauty of our platform is that the hardware is the same, you only need one device for all the 25+ biomarkers we can test for, you just need a different test kit and then we basically upgrade the software to add the new biomarker to the menu.
AFN: What kind of progress have you made so far?
RJ: We’ve initially focused on the dairy sector in India, but, we also see early adoption in other markets as the problems we’re addressing are global, so we’ve got pilots with partners in Israel, Italy, and a few other countries. We’re selling to Nestlé and the big milk cooperatives such as Amul, and we have pilots set up with Lactalis and Parmalat. We’re also talking to providers of veterinary services, because they work with farmers on a regular basis.
AFN: Does your tech only make sense in markets that are less mature/consolidated?
RJ: In a market such as Europe or the US where you have more very large farms, they still don’t test for all the biomarkers we can look at on site at the farm, so they still have to send samples to the lab, so that’s where we come into play and can test for biomarkers such as progesterone and antibiotic residue at the farm gate.
AFN: How has your strategy evolved since you started?
RJ: From the beginning, our focus has been to sell the devices and strips to bigger brands like Nestlé as that’s where we’ll get volumes. But we’ve also seen that there is demand for a pay-as-you-go model, which we call DaaS or diagnostics as a service for India and Southeast Asian markets with small farms that still don’t work with large brands or milk coops.
The idea is to provide diagnostic services to these small and medium sized farmers via a pay as you go model so they do not have to invest in the device. We have two partners currently in the north of India that will go to the farm, charge for the tests and provide the results right away. Over time we’re also looking at working with local entrepreneurs that can provide our services but also things like medication, veterinary services, feed and fodder.
On top of that, we will also be adding tele-veterinary services, because it’s not just about diagnostics, it’s also about what to do next if you detect early, so it’s basically a video consultation to help farmers start treatment early.
AFN: How have you funded the business so far?
RJ: We started in early 2020, we got our first round of seed funding from Beyond Next Ventures in Japan and we were also incubated at the [government-backed] biotechnology incubator C-CAMP in India. That helped us validate the technology and the platform and set up pilots before launching it commercially last year. After the initial funding, we’ve also received some small funding from BIRAC, which is from the Indian government, along with $100,000 from AgFunder as part of the AgFunder GROW Impact Accelerator out of Singapore.
We’re currently raising $2-3 million for our next round of funding for commercial scale up in the dairy sector in India and internationally and for platform expansion in agri-diagnostics in fish, meat, poultry and grains.
AFN: What are your biggest challenges right now?
RJ: To scale up, we need capital, at least for the next couple of years, if we want to break even by the end of 2025. And obviously, fund-raising is time consuming and stressful, as you’re also trying to run a business, keep the team upbeat and so on.
I have entrepreneurial DNA, so I am ‘always on.’ There’s no stopping or rest time, and you have to make time for the team, for talking to customers and investors, but I try to make time to get some exercise, grab a coffee and listen to some good music to ease the stress levels!
But what we’re building is very exciting. Last year was amazing because we were selected for the AgFunder GROW Impact Accelerator, we won the ‘Innovation in Sustainable Farming Practices – Animal Care’ category at the International Dairy Federation (IDF) awards in Chicago, and we were also part of the GROW-NY Food and Agriculture Business Competition. Recognition like this provides a big boost and helps you get up every day and keep moving forward.
The deadline for applications to the fifth cohort of the AgFunder GROW Impact Accelerator is February 25. As part of GROW’s 2024 program, which kicks off in April, 10 founders will receive a $100,000 cash investment from AgFunder, introductions to its global network of co-investors, and mentorship and support from Singapore-based agrifoodtech accelerator, GROW, over a five-month period.
The hybrid program combines virtual components that support founders to grow from their home markets and in-person components connecting entrepreneurs to the vibrant Singapore agrifoodtech ecosystem.
Founders will receive tailored business coaching and mentorship from experienced industry practitioners, plugging into GROW’s agrifood network with the goal of scaling-up for global growth. Find out more and apply HERE.
