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Strella Biotech scores $3.3m seed round co-led by Yamaha to track ripeness with IoT

May 6, 2020

Fruit can be expensive, particularly if it is out of season. This makes the tendency for raspberries to begin cultivating mold before you’ve even gotten your groceries from the supermarket to the fridge all the more aggravating. But a mealy apple’s journey to your kitchen table began long ago and was largely subject to a guessing game around timing and shipping.

“There are a number of crops that will continue to ripen after being harvested,” Nolan Paul partner and global agtech lead for YMVSV at Yamaha Motor Ventures, tells AFN. “When apples come off the field, they’re stored in an atmospherically controlled storeroom that’s filled with gas to inhibit ethylene: which causes ripening. The question becomes when do they open those doors and ship out that fruit? It’s very expensive to open the door. This is a clear pain point among packers.”

Yamaha Motor Ventures and Catapult Ventures recently co-led the $3.3 million seed round into a startup that wants to help, Strella Biotechnology. The startup combines novel IoT biosensors with actionable insights to maximize freshness and reduce spoilage of fruit. To date, it reports monitoring 150 million fruits in the packing segment of the supply chain, where some fruits can be held for up to a year to better align with demand. 

Also participating in the oversubscribed round were Union Labs, Mark Cuban, Red & Blue Ventures, and supply chain pioneer Art Mesher. This funding represents an evolution of Yamaha’s investment activities to date, which have largely been focused on field-level innovations. As Paul puts it, Strella takes Yamaha’s portfolio further downstream.

“Everything we do is about high value, niche markets. When we look at the specialty crop space, it’s about how to maximize production for farmers while maintaining, maximizing, and optimizing quality for the consumer. You can grow the best fruit but once the consumer is able to eat it, the quality may have changed.”

The new round of capital will be used to help the startup expand its product into the retail distribution market while also refining its technology for on-pallet sensing to help capture data throughout transportation. Producers in the food supply chain have already shown some amenability towards using sensors to track food quality before reaching the retailer, but that’s when it could get challenges for Strella, admits Paul.

“Packers will remain a core piece of their business but one challenge Strella will face is learning about retailers, what it means to work with them, deploying the sensors across pallets. That’s not going to be simple,” Paul explains. Considering the high-dollar value of most fruits, however, retailers may be eager for a way to better manage inventory according to spoilage potential instead of just traditional “first in, first out” rules of thumb.

For some, the idea of needing to affix a sensor to every package or pallet could signal too much friction to generate sufficient industry adoption. StixFresh has developed a sticker that is affixed to food to extend shelf life up to fourteen days, according to the company. The idea of slapping a sticker on every piece of fruit may seem outrageous, but most fruit already features some kind of sticker, the company realized.

“The ultimate holy grail would be a sensor at the per fruit or per clamshell level measuring different gases about quality and shelf life. Deploying at the consumer level so that the fridge could say eat this type of fruit within two days or it will go bad; that’s a long way off. Being able to do it at the pallet level is doable and we already see technology being placed on pallets. It will be driven by the retailer and where they see value,” said Paul.

Some startups have decided to approach spoilage from this consumer-facing end. Hazel Technologies has developed a package insert that releases vapors to triple the shelf-life of produce by slowing the aging process and preventing fungus or decay, according to the company. Food labeling tech startup Mimica, which won the People’s Choice Award at Rabobank’s 2018 FoodBytes! competition, developed a tactile label that changes as food approaches from smooth to bumpy.

Wasteless is taking a slightly different approach by using a dynamic pricing system to adjust the price of produce downward as it nears expiration to encourage consumers to purchase older items before fresher items.

Sensing spoilage sooner

Although food waste is not the main target of Strella’s technology, its innovation has some potential benefits for optimizing food flow throughout the supply chain. Overripe peaches may seem like a champagne problem in the age of Covid-19, but the broader implications for food waste are serious. The US wastes around 62.5 million tons of food annually with 52.4 million tons tossed into landfills or incinerators and 10.1 million tons lost at the farm level, according to food waste-focused organization ReFED, which recently launched a grant fund to assist food capture and redistribution efforts to also ease food insecurity during Covid-19.

The pandemic is making our food waste problem even worse. Sudden job loss, shelter-in-place orders, and a sudden severe misalignment between supply and demand are wreaking havoc and putting new emphasis on the need for traceability and tracking technologies for players all along the supply chain.

Startups have tapped a wide variety of technology-driven approaches to help improve the efficient flow of food throughout our supply chain. 

Swiss company AgroSustain is using time-release biologics to thwart off food-ruining mold both before and after harvest. Post-farm gate, Full Harvest’s platform seeks to better connect food producers with food buyers while finding homes for imperfect produce that would otherwise be discarded. AgShift is using deep learning to track the freshness of produce based on computer imaging. Maersk, the world’s largest transporter of food, backed software-driven Spoiler Alert in 2018. The startup offers a software and services model that enables item-level tracking and reporting of food recovery and waste diversion activities, while facilitating food donations, discounted sales, and organics recycling to local, regional, and national networks of outlets. It’s worked with the likes of HelloFresh and Sysco so far.

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