Started in 2016 by Silicon Valley veteran, Sid Chakravarthy, StaTwig is a firm that uses Internet of Things (IoT) and Blockchain to monitor every minute step of the products’ journey.

May 6, 2019

Despite the many advancements in technology, when one-third of the world’s food is lost or spoiled in logistics because of poor management and human error, the need to come up with problem-solving solutions becomes pressing.

That is what motivated Silicon Valley veteran Sid Chakravarthy to form StaTwig, a firm which uses Internet of Things (IoT) and blockchain to monitor every minute step of the products’ journey, providing complete transparency and preventing disruptions in large-scale deliveries.

However, the challenges associated around logistics are not mere limited to transporting food. For example, the world's largest procurer and distributor of vaccines, UNICEF, wants to ensure the quality and safety of the vaccines.

From transporting food to vaccines, inefficiencies of the temperaturecontrolled supply chains, known as cold chains, often leads to interruptions, issues around safety, and regulatory problems. Nearly 50-60% vaccines lose their efficacy owing to cold chain failures. In addition to this, 80% of the vaccines lose their efficacy due to supply chain mismanagement.

Last December, UNICEF decided to explore what StaTwig had to offer and made a $100,000 investment in the Hyderabad- based company. The investment from the UNICEF Innovation Fund was to work on the smoothdelivery of vaccines to children in need. Notably, StaTwig was among the six of the 50 companies that received the investment.

UNICEF Innovation Fund essentially provides equity-free funding for startups to strengthen their technologies. The investment is to develop the technology in general and is not a commercial contract. Building blocks For Chakravarthy and Ravi Kumar, StaTwig’s Chief Operating Officer, working on emerging technologies that would create an impact on existing products at Kemp Technologies in the US, piqued their interest to startup. In 2016, Chakravarthy returned to India and spent some time in the manufacturing sector to understand the problems of supply chain management. That’s when he stumbled upon the issue of perishable products and the wastage in the perishables due to lack of visibility in the transit and decided to form StaTwig. Kumar, 57, told ET that they wanted to track the products’ journey using realtime information and thus, chose IoT and blockchain. IoT, defined as a system of internet-connected objects, records information such as the product’s location any time using sensors and would send the information via GSM networks to all stakeholders. “One of the problems was that there’s not just one stakeholder but many (suchas manufacturers, distributors, and retailers). So the data needs to be shared equally among all. That's where blockchain came into place,” he said.

Blockchain, known as the incorruptible digital ledger which carries a timestamped series of fixed record of data, isn’t owned by a single entity, but can be shared and seen by everyone and anyone who has access to it.

First step: Empowering the fishermen

Early validation for the product came in 2017, when StaTwig undertook a fisheries project, partnering with the University of California, Berkeley and the Government of Andhra Pradesh. The objective was to improve the transparency, monitoring, and tracking of the fish caught by the subsistence farmers of Andhra, which were to be exported to markets in Asia and the US. Chakravarthy explained that from the port where the fish is caught to the local market where it’s sold, there are multiple stakeholders. However, due to negligible communication and lack of information shared among them, it’s usually the fishermen or the local sellers who get the short end of the stick and are paid less than they deserve. The fishermen are unable to ensure if the fishes reached properly to their destination or prove the information on the quality of the catch once they’ve been shipped. In case something goes wrong during shipping or at any other stage, the fishermen are unaware of it and this results in them losing negotiation powers with the national distributors.

To solve this issue, StaTwig provided each fisherman with an Android smartphone which had a pre-installed app where they can track the movements of the fishes. The certificates provided by fishing inspectors after they’ve inspected the fishes could be seen in the app. Moreover, the local market buyers could see the inventory of each fishermen. This allowed the fishermen and local sellers to have an improved price negotiation with the national distributors. While this was Phase I of the project, Phase II has already begun in which the startup will be collaborating with financial institutions like NABARD to provide micro-financing to fisherman and local distributors by getting the institutions to join the blockchain network. “In future we can create crypto Others 1/25/23, 12:02 PM UNICEF: This Indian blockchain startup is helping UNICEF transport millions of vaccines across the world https://economictimes.indiatimes.com/small-biz/startups/features/this-indian-blockchain-startup-is-helping-unicef-transport-millions-of-vaccines-across-the-world-statwig/articleshow/69091941.cms?utm_source=cont… 6/24 tokens which can be exchanged for fiat money, to pay the fisherman and distributors immediately,” Kumar said

Recognition of potential

StaTwig’s moment in the sun was when it was selected to be a part of the UNICEF Innovation Fund's first cohort of blockchain investments. Generally, vaccines go through lots of change in ownership, from national offices to regional offices to health centers. Here, StaTwig records every change in ownership and one cannot repudiate the information. “In layman terms, it's almost like a notary that validates a transaction,” Kumar said. The second important aspect for vaccines in general is the need to track the temperature. Kumar explained that vaccines get labeled with a color according to their temperature status and through sensors; the company is planning to track that status. Notably, vaccines are temperature sensitive and often get spoiled if they are not delivered on time. The third aspect that is important to anyone dealing with vaccines is the Drug Supply Chain Security Act (DSCSA) and the regulations related to it that is prevalent world-wide. At the wholesaler or distributor level, if you pick up any vaccine or drug, the serial number in that product should be able to tell you the entire journey of the material.

Today, StaTwig is working with multiple UNICEF offices in different countries to make this service available. “UNICEF buys billions of doses of vaccines every year. Guaranteeing the quality and safety of vaccines is very important. The UNICEF SMART CHILD initiative will create an opportunity to securely track and trace the vaccines from manufacturer to child by leveraging blockchain technology. The benefits of the solution are continuous visibility and improved quality.” a spokesperson from UNICEF told ET. UNICEF says vaccines save up to 3 million lives yearly, protecting children from potentially deadly, highly infectious diseases such as measles, pneumonia, cholera, and diphtheria. StaTwig has been self-sufficient since 2017 and was one of the few blockchain startups that year that were generating revenue through the solution centre. It is now targeting to generate around $1-1.5 million by the end of 2019 and looking to raise an average of $600,000 through external funding. While the three-year-old startup has built a newfound trust in supply chain, it did face some minor challenges initially. One of them was explaining blockchain to clients as it was a fairly new concept in 2017 and there was a lot of confusion between the Crypto market and blockchain. “That led to some delays in terms of closing contracts,” Chakravarthy said. Dealing with skepticism around handling and processing sensitive data has been another issue, but Chakravarthy adds that stakeholders have nothing to

Dealing with skepticism around handling and processing sensitive data has been another issue, but Chakravarthy adds that stakeholders have nothing tofear. Chakravarthy explained that he did not want any single entity holding everyone’s data and that blockchain offers decentralized models where no single entity is actually owning or controlling the data and instead, everyone has control over their data, but not over the entire ecosystem. "No one wants another Facebook or Google to manage date. Blockchain works the best in this case,” says Kumar.