Agtech startup BlockGrain gunning to receive $1 million from NEM blockchain fund
Thursday, January 18, 2018/
With the whirlwind of hype and interest around 2017’s favourite business buzzword, taking a level-headed and considered approach to “blockchain technology” may seem unusual.
But that’s exactly what agriculture supply chain tracking startup BlockGrain (play on words intended) did, with founder Caile Ditterich telling StartupSmart when he started the agtech company in 2014, he viewed emerging blockchain technology as a “big hammer looking for a nail”.
But instead of grabbing that hammer and swinging it wildly, like thousands of companies have done, Ditterich took a step back and decided to become the nail instead.
“We found core problems in agriculture we knew to be an issue and set out to find solutions to them. We knew by the time we did that, the platform would be stable enough to adapt blockchain into the business,” he says.
“We knew the tech was big and coming, but until it fully proliferated we weren’t prepared to invest our money into the unknown.
“We don’t aim to fit blockchain in areas it’s not needed, we were looking for real world issues that don’t have a solution.”
Instead, the BlockGrain team got to work on their agtech platform, which provides greater visibility to farmers and grain brokers over their supply chains through an integrated logistics platform.
Ditterich himself is a fifth-generation farmer, and his history in the space made him astutely aware of the problems facing the farming community is facing, saying there’s up to 30% of value for farmers lost through inefficient supply chains.
However, now the startup has an minimum viable product (MVP) that has been used in the market for the last two growing seasons – with more than 1000 farmers nationally – they’ve announced it’s time to take it to the blockchain.
They’ll be using the NEM platform, says Ditterich, and BlockGrain is one of the first Australian startups looking to take advantage of NEM’s $90 million investment fund, seeking 800,000 in digital currency XEM from the Singaporean company.
Projects receiving funding are voted on by the NEM community, and voting is set to end on Monday for this round of funding.
Ditterich says he’s fairly confident the team will win the community’s support for the funds, which would mean access to approximately $1 million in funding at current prices.
The reason for choosing NEM
The vast majority of crypto capital raises over the past 12 months have been completed on the emerging Ethereum platform.
The BlockGrain team is choosing a different path by electing to use the NEM platform as a way to build blockchain tech into their company.
Ditterich says this choice was made for a number of reasons, namely his concerns about the scalability and longevity of platforms such as Ethereum, which despite efforts from developers, still remain unsolved.
He’s concerned about what would happen to the platform if the issues continue to stump developerss, believing the quality of service could “suffer”.
“[NEM] is brand new and built from the ground up, so it’s something that we can really adapt to our system. They also haven’t been spruiking themselves in the last three years, they’ve just been going about their business and focusing on their product, which we can relate to,” he says.
He also notes that the community voting process puts BlockGrain in front of people the world over, which has lead to some networking opportunities and connections from users in the agriculture industry in places such as Japan and Russia.
In a statement, global director of global partnerships & strategic alliances at NEM Jason Lee said he was keen to support the BlockGrain team as “an Australian innovation for the world”.
“We have been looking for a company with real use cases and BlockGrain is a natural fit. This team is clearly on a mission to succeed. Their business model and platform are a perfect match for the core features of NEM blockchain,” he said.
On January 8, when voting for BlockGrain’s funding first opened, 800,000 XEM equated to around $1.7 million. In the last 48 hours, the entire cryptocurrency market has dropped over $US250 billion ($358 billion), seeing the amount BlockGrain is seeking through the NEM fund drop in actual dollar value to $728,000.
While the markets have since recovered, prices remain entirely uncertain, and could see the value of the startup’s incremental and milestone-reliant funding change wildly. However Ditterich isn’t fazed, saying BlockGrain is entirely self-reliant already, and has a number of other investors “knocking on our doors”.
Asked why the startup is going through NEM’s funding process instead of using another model, like an Initial Coin Offering (ICO), he says it’s due to the integration and involvement with the NEM community, and the “number of unknowns” associated with the ICO process.
For startups considering blockchain tech, Ditterich says the technology should only be used in situations where it has real use cases, but also says “everything is an unknown” until you do it.
“If you envision a business idea, it can change and evolve 1000 times, and unless you actually start working on it, you can only speculate,” he says.
“Find what you want to change, and though you need to be prepared to merge and adapt, just make a start.”