Bext360 has raised $1.2 million in funding to transform the global coffee supply chain. The Denver, Colo.-based company will use blockchain, artificial intelligence, and the Internet of Things to improve the flow of coffee and bring greater prosperity and equity to coffee farmers.
Bext360 is coming out of stealth with its first product, as well as its “bext-to-brew” platform. SKS Venture Partners led the funding round.
Coffee is the second largest traded commodity in the world and has become a $100 billion market worldwide. Women are responsible for 70 percent of growing and harvesting. But a recent study by researchers at Harvard University found that the coffee-trading market isn’t fair.
Farming communities in developing countries must accept low prices and delayed payments for their harvested goods.
Millennials and other coffee connoisseurs, however, are demanding a fundamental shift in coffee collection and supply chain transparency. Bext360 uses blockchain technology from Stellar.org to bring transparency to the coffee supply chain, allowing the product to be traced from bean to brew and ensuring that fair-trade payments are made.
Bext360’s first product is similar to Coinstar, but for coffee. Using machine learning and artificial intelligence, the machine will evaluate the coffee cherries and beans and then divide them into grades based on quality. Farmers will have access to a mobile app to view amounts of each grade and accept offers for payment. Powered by Stellar’s network, the application immediately pays the farmers for their product. Previously, coffee farmers would drop their crops off to buyers, who would manually sort and inspect the beans and then pay the farmers, sometimes up to months later.
Bext360 utilizes the Stellar network, a distributed, decentralized protocol for real-time transactions, to record timestamps, value, or amounts, thus making it possible to accurately process payments and credits. Through the use of Stellar’s network, all parties involved in the transaction — companies, farmers, and co-ops — can access the data transparently, and farmers can be paid in real time.
Bext360 will be deployed to collect and analyze coffee and to make instant payments to farmers based upon the quality analysis. By making digital payments for loans and interest directly to lending organizations, while analyzing and collecting goods, Bext360 machines will literally pay for themselves. This process provides critical capital to entrepreneurs by making it less expensive for lenders to monitor and collect on capital equipment loans. This investment stimulates new businesses by providing capital to process commodities in the market of origin.
In addition to enabling payments, the Bext360 platform enables the collection of key data at unprecedented levels. For example, Bext360 machines will collect data on the quality and efficiency of farming practices and then analyze supply chain dynamics in real time to create new business opportunities and supply chain efficiencies.
“With the launch of Bext360, we’re aiming to transform the coffee supply chain, while bringing consumers and farming communities together to improve product quality, community livelihoods, and the consumer coffee experience,” said Bext360 CEO Daniel Jones, in a statement. “We are building on the emergence of mobile infrastructure across developing countries and the advent of blockchain technology, IoT, machine vision, and artificial intelligence.
He added, “Developing countries leapfrogged the wired economy directly to mobile connectivity, which allows suppliers and buyers to shift directly to digital payments processing without legacy technology companies blocking progress. This mobile access allows Bext360 to implement our technology directly into the supply chain for traditional supply chain optimization, product payment, and the financing of capital equipment needed to increase the value of commodities in the country of origin, bringing more equity to local businesses and communities in emerging economies.”
Jones, a serial entrepreneur with nearly two decades of experience working in emerging markets, started the company. He previously founded the first U.S.-owned company to successfully export conflict minerals from Democratic Republic of the Congo (DRC) to the U.S. in compliance with supply chain and traceability requirements under the Dodd-Frank Act.
Prior to that, Jones was a key architect with the Defense Intelligence Agency and designed the Joint Worldwide Intelligence Communications Systems (JWICS), the first and now largest TCP/IP system to transfer voice, video, and data across top secret networks.