Security type: Crowd Note
Valuation: $7.75 million
Conversion discount: 20%
Minimum investment: $1,000
Where to invest: SeedInvest
Deadline: September 19, 2020
I started a new Christmas day tradition about five years ago. Whoever was opening their presents — be it my wife Cecily, or my “kids” Nick and Rachie (and their spouses) — had to look at the label and state where the gifts were made. Invariably, 80% to 90% came from China.
I don’t have anything against China. But working conditions can be quite abysmal there. And their quality control — from toys to meds — isn’t the most reliable. Where things are made (and what they’re made with) matter.
If the global coronavirus pandemic has taught us anything, it’s that we all live in one world and that blue spinning globe is getting smaller and smaller. What happens in China has ramifications here. And that’s also true for Africa, South America, the subcontinent, southeast Asia… All the places where we source our raw materials, food and consumer goods.
The U.S. is the biggest consuming country in the world. We need to take responsibility as consumers for what we buy and consume. And gradually, we are. Sustainability, safety and authenticity are being taken more and more seriously — even as fraud, contamination and human trafficking continue to cast a large shadow on commerce.
More companies are becoming willing stewards of the environment. Investing approaches are putting more emphasis on backing companies with small carbon footprints or helping other companies reduce their carbon footprint. Blackrock, for example, has made sustainability the “new standard for investing.” And regulators are increasingly demanding greater transparency and proof that relevant laws are being followed.
It’s getting serious. And that means PR statements no longer suffice. It’s a new world. Companies that want to thrive need to prove that their operations — and those of their suppliers — run sustainable and responsible operations.
But until the company I’m showing you today — Bext360 — came along, it was impossible to get that proof… impossible to declare with 100% certainty where your goods were made… impossible to measure the carbon footprint for the entirety of your operations… and impossible to guarantee that your family-owned (and other) suppliers got a fair price.
Bext360 mastered three rapidly advancing technologies — blockchain, Internet of Things, and AI — to create a tracking technology that supports sustainable and ethical manufacturing. It made its tech smart and incorruptible. And it created ag commodity backed coins that can be valued and traded according to non-traditional variables like nutritional value or how much water a crop needs to grow.
That’s a lot to swallow. To illustrate Bext360’s capabilities, let me describe Bext360’s project for Nespresso. I love Nespresso coffee by the way. But I don’t drink Nespresso at home — mainly because I hate their pods even more than I love their coffee. They’re made from aluminum and are recyclable. But most of them end up in landfills. I’m not a big fan of that.
Nespresso understands I’m not the only one who feels that way. It knows it has a problem. So it went to the company best able to help: Bext360. Here are some of the services Bext360 is providing…
- Recycle tracking. A B2B program for hotels and restaurants that serve Nespresso coffee. The technology even generates a “real time” heat map of where all the pods end up.
- Giving back. The development of a B2C program for individual consumers to offset their environmental footprint. They give to their favorite environmental charity and Bext360 tracks it. It will be a feel-good program popular among Nespresso’s wealthier demographics.
- Sourcing sustainably. When this program goes live, it will allow Nespresso to collect carbon credits.
Technology that can do all this and more wasn’t easy to put together. It took five years to create the platform. But now it can track data from origin and across processed lots, various organizations, integrations and retail parties. It can also measure that data against compliance with sustainability, ESG and regulatory requirements.
And those five years were worth it. Bext360 was among Forbes‘ Most Innovative AgTech Startups in 2018. It also designed the system for what is believed to be ‘the world’s first blockchain-traced coffee’, offered by Coda Coffee (as reported by the Wall Street Journal).
While other companies claim to do similar things, Bext360 is rapidly gaining a reputation of actually doing it and doing it much better. TradeLens — which digitizes documentation for a company’s supply chain — runs a much bigger operation than Bext360. But it refers customers who want to trace products to their origin to Bext360.
Bext360’s reputation is clearly growing. Many of the deals the company recently closed or is about to close are with companies that sought it out… Like the Indonesian company that wants to trace coffee production… or the tree forestry company from Peru… or the Vietnamese maker of (PPE) masks… or the pineapple trading company from Florida. Honeywell has initiated discussions with Bext360. And The Nature Conservancy is about to sign off on a big deal. That’s a strong series of deals.
Founder and CEO Dan Jones modestly characterizes 2020 sales as a “steady ramp-up.” Last year’s sales were just north of $350,000. This year, Dan says, sales will end up anywhere from $300,000 up to $1 million — depending on whether a couple of the bigger deals he’s discussing close toward the end of this year or the beginning of next year.
Next year he expects customer acquisition to pick up as Bext360 onboards between 10 and 20 major customers. The problem now isn’t demand. It’s the onboarding process itself. It just takes time. Bext360 is on top of this too. It has changed its onboarding process so between 80% to 90% is now automated. Companies can now customize most of what they want without any help from Bext360’s staff.
That’s important. Because Bext360’s growth is poised to accelerate. The market is at a major inflection point where Bext360’s services are going from “nice to have” to “need to have.” A big driver of that growth is regulations (like what UK lawmakers have proposed to address deforestation). Regulators are demanding better proof of sustainable operations and measures of sustainability like carbon offsets.
The other big driver is consumers. Customers of large enterprise resource planning companies — like SAP, NetSuite, MS Dynamics — and of large marketplace companies — like Amazon and Zalando — are demanding more data, information and transparency regarding the social and environmental impact of the products sold on their platforms.
Investing in Bext360 means investing in a company that needs to ramp up to meet the growing demand in its market and the even faster-growing demand for its services. With the capital it gets from this raise, the company plans on reaching at least $1 million in annual recurring revenue (ARR) in 2021.
With founder Dan Jones at the helm, it’d be shocking if it doesn’t meet its 2021 revenue goals. Dan is my kind of founder. Back in 1991, he was with the Defense Intelligence Agency. He was a key architect of the Joint Worldwide Intelligence Communications Systems (JWICS) — the first TCP/IP system to transfer voice, video and data across Top Secret networks. He recently spent five years living in Kinshasa (capital of the Democratic Republic of the Congo) where he founded RAMIKA, the first US-owned company to successfully export conflict minerals from DRC to the U.S. And he did it in compliance with supply chain and traceability requirements under the Dodd-Frank Act.
Dan has founded five startups — and all of them have been successes. So why do a sixth? Dan wants to enable transparency, carbon offsets and traceability in exchange for sustainable financing. He says that “digitizing the entire journey a product takes will allow financial players to finance sustainability investments with much better financing rates.”
That’s a big vision. And Bext360 has developed the right technology at the right time to realize it.
How to Invest
Bext360 is raising up to $1 million on SeedInvest. If you don’t already have a SeedInvest account, you’ll need to sign up for one. Once you verify your account and are logged in to SeedInvest, visit the Bext360 deal page.Then click the button to invest. Enter the amount you want to invest, starting at $1,000, and proceed through the required steps. Be sure your investment is confirmed, and then you’re good to go.
This opportunity, like all early-stage investments, is risky. Early-stage investments often fail. The investment you’re making is NOT liquid. Expect to hold your position for five to 10 years. An earlier exit is always possible but should not be expected.
All that said, I believe Bext360 offers an attractive risk-reward ratio.