Denver-based startup Bext Holdings Inc. (Bext360) is harnessing the power of artificial intelligence and blockchain technology to make it easier for coffee farmers around the world to get paid a fair price for the coffee beans they grow and sell.
The company has developed a unique scale-inspired machine that utilizes machine learning and AI to rapidly analyze the quality of a farmer’s coffee cherries and divide them into grades in the field. Both farmers and buyers will then use Bext360’s mobile app to negotiate a fair price. Previously, buyers were required to sort and inspect coffee beans manually, a process that left farmers in limbo — and without pay — for months at a time.
Bext360 uses the Stellar network, a distributed decentralized platform for real-time transactions, to operate its app and cloud-based software. Stellar’s blockchain technology allows farmers and buyers to create a record of where beans were grown, who bought them and at what cost. The process creates a whole new level of transparency for the $100 billion coffee industry and has the potential to address a number of inequalities present in the coffee value chain, including low, unfair prices and delayed payments.
“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. The 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 equality to local businesses and communities in emerging economies.”
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With an increasingly enlightened consumer base, transparency data has become more important than ever. Jones believes that his company’s technology can help shift the coffee industry — and others, such as cocoa — towards complete transparency and traceability.
“Groups working on fair trade spend a lot of overhead on tracing materials. They use rudimentary tracing mechanisms. And it’s very imprecise. People in the field can still get exploited,” said Jones.
To launch and scale its product and ‘bext-to-brew’ platform, Bext360 has raised $1.2 million in funding from SKS Venture Partners, a venture providing consultancy, interim management and IT services specializing in domestic and cross border e-commerce logistics. “Using a smart phone to pass payments through to farmers directly, cutting out middlemen who too often take more than their fair share of any transaction, is what caught our attention,” said investor Mark Spencer.
“Bext360 bridges the gap between a coffee farmer and your morning cup of coffee,” Spencer added.