Bengaluru based Qzense Labs claims to help retailers to deliver high-quality fresh food to their customers, earn higher margins of 30-40% and reduce losses by 40-50%
Backed by investors such as Entrepreneur First, JioGenNext and Ireland’s SOSV, Qzense's last round valuation in July 2019 stood at $2 Mn and has raised total funding of $320K
Qzense uses NIR spectroscopy and artificial olfaction to accurately assess quality of fresh food in the supply chain, giving real-time insights to businesses
India produces some of the best fruits and vegetables in the world, but due to inefficiencies in the supply chain, much of what remains in India after exports gets lost due to wastage. Industry experts estimate that nearly 50% of fresh produce does not see the light of retail outlets or reach the end customers.
Even though India is the second-largest producer of fresh fruits and vegetables, after China, there exists a massive dearth in the ecosystem as a large majority of the supply don’t meet the international standard requirements for exports. According to IBEF, agriculture export from India reached $38.54 Bn in FY19 and $32.16 Bn in FY20 (February 2020).
The growth of the industry is expected to be fueled by the digitisation across the agri value chain, alongside startups working towards improving the efficiency and quality in the industry, including Ninjacart, WayCool, MeraKisan, Farm Taaza, Gobasco, Kamatan, Farmart, Fasal, CropIn, Farmart among others, with Qzense joining the fray with its IoT-powered supply chain solution.
The agritech startup incubated at Reliance JioGenNext enables food businesses and retailers to get accurate and non-destructive qualitative grading of fresh foods in the supply chain. Qzense’s quality assessment and management solution are powered by sensors, and internet of things (IoT) devices, with machine learning algorithms crunching out analytics.
Qzense’s IoT devices are based on technologies such as NIR spectroscopy and artificial olfaction, which are usually limited to lab applications.
Based in Bengaluru, Qzense Labs was founded by Rubal Chib and Srishti Batra in May 2019. “The opportunity is huge. In India, 90% of the fresh food supply chain is unorganised, and with our solution, we can not only help retailers in enhancing the quality of fresh produce, but also bring in efficiency in the entire ecosystem,” Chib said.
Deeptech Powering Qzense’s Agritech Play
The company said that it can accurately assess the quality parameters of fresh foods by using an infrared scanner and machine learning model to develop insights on internal spoilage, ripeness, sweetness and shelf life of the product.
NIR spectroscopy or near-infrared spectroscopy is an analysis technique used in the food and agriculture industries to check the quality parameters of food or produce. Artificial olfaction, on the other hand, is an electromagnetic technique used through a device that mimics the sense of smell by analysing the chemical composition of the air in a given space.
Traditionally, when it comes to grading and sorting of fresh produce, businesses rely mostly on human intuition of identifying the shape, texture and smell of produce. Typically, some of the advanced techniques involve cutting some of the samples and trying to access the quality of fresh food. In agri-terminology, the technique is called the lactometer analysis, where a fruit’s juice is extracted from the identifying the sugar content, scratch etc.
Qzense, on the other hand, said that it is going beyond the visceral range by penetrating the scale of the commodities without harming the product and gives an assessment of water content, sugar and starch level etc, accurately using infrared sensors. In other words, it eliminates human error and increases the accuracy of assessing the quality of the product much faster. Most importantly, by restoring better quality, the retailers can capture the margins better.
“Not only the quality aspects. But once the customers know the parameters of the produce, retailers will be able to manage the pricing better and take logistics decisions accordingly, be it in terms of sending the produce to a longer distance, storage and distribution,” CEO Chib told Inc42.
Technology That Adds To The Value Chain
According to the Qzense cofounder, the technology can easily help retailers and aggregators increase their margins by 30%-40% as they are able to assure the highest grade of quality across the value chain, which is a more premium product in the market. Also, Qzense claims that it is able to reduce the post-harvest loss by 40%-50%. While we were not given granular data pertaining to this metric, given that India’s post-harvest losses stood at INR 93K Cr ($12.7 Bn) in 2019, such solutions can make a huge impact.
When it comes to the division of responsibility, CEO Chib takes care of the operations, sales, investments and customer support, while Batra is the tech head and manages technology backend, data analytics and product development operations.
SaaS Revenue Meets Made-In-India Hardware
Backed by UK-based Entrepreneur First, JioGenNext and Ireland’s SOSV, Qzense was valued at $2 Mn in July 2019, and has raised a total of $320K in funding. The company earns its revenue on a subscription model, where it works with organised retailers in helping them manage their fresh food supply chain. It charges monthly subscription fees for infrared devices (Q Sense and Q-Log) as well as web dashboard, which stores data about the quality of the produce and offers actionable insights to customers.
Its devices are manufactured and designed in-house in a research and development lab in Bengaluru, and the company claims to be sourcing all the components locally, except the chips and PCBs which are imported from outside India. Qzense Labs said that it is currently using 3D printing technology to manufacture the device, but plans to scale once the demand increases.
Currently, the company claimed to be working with some of the biggest retailers in the country, including Reliance Retail and others, and said that a few are in the contract stages. Thanks to the JioGenNext accelerator programme, which helped Qzense in building a scalable business model. Also, the cofounder told Inc42 that the programme helped them connect to various stakeholders, mentors and experts in the industry.
Last week, Qzense labs also got selected for Lumis Partners-backed Supply Chain Labs’ cohort, where the programme is said to mentor and help Qzense in solving agri supply chain hurdles in the country.
It has to be noted that Qzense is one of the early entrants when it comes to fresh food agri supply chain quality management, though other cold chain supply companies are venturing into this market as well. Globally, the startup competes with the likes of Giki, Zeto, QC4U and Wektoo.
With the latest agri reform in place, Qzense’s Chib believes that India’s agri export capabilities can be scaled up and this is where quality will play a big role. “We are positive that our technology will help growers increase their exports by assuring high-quality standards, thereby increasing farmers’ income,” Chib said, adding that company is aggressively looking at enhancing its solutions for exports in the near future.
Update: October 13, 2020 | 21:00
A typo error in paragraphs which earlier read ‘NRI spectroscopy’ has been corrected to reflect ‘NIR spectroscopy.’