UK anti-food fraud firm gets £2m backing

A company developing a way to tackle food fraud has won an investment of £2m from a Canadian entrepreneur.

Northern Irish tech firm Arc-Net is developing a blockchain technology to improve the traceability and authentication of food.

The investment was made by Dr Richard Steeves, who founded healthcare outsourcing services company Synergy Health in 1991. The company expanded into the food testing market in 2014.

Steeves, who becomes Arc-Net's chairman, described the UK firm as a fantastic investment opportunity. "I am very excited to be supporting Arc-Net and their objective to revolutionise food supply chain security using their novel technology. I also find the social aspect of Arc-Net's service compelling, working with the food industry to improve transparency and authenticity."

The investment will be used to help finance growth of the three-year-old company and increase the Arc-Net's headcount from 20 to 50, said Kieran Kelly, its chief executive. Kelly called Steeves "a visionary in the truest sense of the word".

"The fact that he shares our vision for Arc-Net is a massive endorsement of our service, our strategy and the potential of our company. We see significant demand for what we have to offer and this investment will put us in a very strong position to capitalise on that."

The global nature of the food chain and rising food prices has made food and beverages a target by fraudsters and counterfeiters. It can be incredibly profitable, with recent estimates suggesting a single shipment of fraudulent food can result in tens of thousands of dollars in illegal profit.

There is growing awareness of food fraud, especially in light of several recent high-profile food scandals, such as the horse meat scandal in the UK, and the issue has become increasingly politicised.

There have been more developments and commitments towards tackling the issue of counterfeit and substandard food and beverages but estimates suggest that anti-fraud measures account for only 5 per cent of expenditures in the food and beverage industry.

According to Arc-Net, food fraud costs the global industry $30bn-$40bn a year, with more than one in three food organisations having been victims of fraud.

The company’s technology is a blockchain, cloud-based platform that is designed to have high levels of security, scalability and flexibility. The technology aims to protectively mark, authenticate and track goods across the supply chain to provide independent validation of food quality "from farm to fork", while also providing operational data such as demand forecasting.

The Belfast Telegraph describes the technology as a database of encrypted DNA samples, which will provide linked information to retailers and consumers detailing the source of the food, its journey to the plate, and other relevant information.

"Our service also increases the information flow across the entire supply chain, which helps ensure authenticity, quality, traceability and compliance, based on blockchain technology," Kelly said.