Sri Lankan startup Tracified receives Japanese investment

Tracified Co-founders Uthpalie Thilakarathna and Dileepa Jayathilaka

By Darshana Abayasingha

Tracified, a Sri Lankan company offering blockchain-based traceability solutions, has received equity investment from Japanese venture capital firm, 360ip. It will take a 20% stake in the Company. 

Tracified is a company incubated within the innovation centre of 99X Technology, and its CEO and Co-Founder Mano Sekaram, described the investment as ‘a landmark event’ in this current constrained global economic sphere. 

Tracified is a blockchain-based traceability solution that connects the entire supply chain. The solution can be applied to scenarios when it’s crucial to assure the integrity of the supply chain. Whether it’s organic produce or Atlantic salmon, Tracified can identify and record movement, temperature and storage durations across every stage, using a multitude of tracking technologies.

Addressing a media conference online, Tracified Co-founder Dileepa Jayathilaka said the solution was conceived for supply chains for fish vendors in Norway, and they had identified its value and applicability for a broader spectrum of customers. Tracified is currently working with UNIDO to provide geographic indication for Ceylon Cinnamon to combat counterfeit products using the brand name. “This way we can provide a guarantee that the Cinnamon they buy is actually coming from Sri Lanka.” The Export Development Board is engaging with the company and stakeholders to bring other exporters and produce under this umbrella. 

“One of the biggest issues in the world today is fake brands in the sphere of food. Traceability technology is available now to trace that. With fish we have done that beginning from the ocean – or farm to fork. People really want to know where their food comes from, and they want assurance there is no tampering. Like with our cinnamon, this will be an important national project which will be extended to other local products as well,” Sekaram added. 

The CEO of 99X Technology added that their post-COVID-19 strategy is to experiment frugally and save every job whilst accelerating innovation. The future of the tech industry in Sri Lanka is in the start-up sphere, he said, and mature companies need to ensure there is enough room for entrepreneurship and empower employees to enter that sphere. 

“I believe that every employee at 99X has the potential to be an innovator or an entrepreneur. Being able to provide such opportunities is what makes us different and lets us rank consistently as a Great Place to Work,” he added. 

Jayathilaka said the investment from the Japanese venture capital firm is an “international recognition of our Blockchain competency. We are proud to be one of the first traceability solutions in the public blockchain. He revealed that Japan is paying significant attention to traceability solutions as Japan receives increased interest from consumers globally for electronic and other products. 

“Tracified is powered by blockchain technology and authenticity of data is ensured as this is crucial for supply chain tracing. This is an engagement that also opens up promising opportunities for Sri Lankan exports and technology provider, and can serve as a gateway for other customers and products into Japan like spices for instances,” Jayathilaka added. 

A delegation from 360ip visited Sri Lanka in December 2019 to evaluate Tracified and its potential for the Japanese market. 360ip Japan CEO Asashi Fujimori stated: “360ip has a focus on investing and developing advanced science and technology ventures on a global scale. Although Sri Lanka’s potential in developing advanced ICT services and products is known to many, only a very few early-stage technology startups survive beyond seed round, due to the lack of a well-established venture capital financing framework with an effective technology commercialisation methodology. 360ip wants to bridge that gap by supporting promising startup ventures to develop their technology and business beyond Sri Lanka.”

He further added: “Tracified was identified by 360ip as a promising venture that has clear potential in developing its technology and business on a global scale. As a startup venture backed by 99X Technology, Tracified had adopted a technology development methodology of an excellent standard from its inception, powered by a team of highly skilled tech professionals.”

Whilst the solution is appropriate for markets with largely formal economies like Japan and Norway, Mano Sekaram commented that it will struggle to implement a similar solution in Sri Lanka from the outset as much of the economy is in the informal sector. “So, the addressable market here is limited, but we are taking a long-term view. The sooner we mature digitally, more the people will who will come into the system.”