PRODUCE logistics startup Glife has clinched S$1.6 million of seed capital that it will sow to cut out the middlemen when getting food from farms to forks.
The seed round was backed by Global Founders Capital, 500 Startups and other angel investors that include food and beverage and tech veterans such as Royston Tay, co-founder of customer support live chat solutions provider Zopim.
The new investment is a key endorsement for the vision of Glife chief executive and co-founder Justin Chou, who began the startup when he spotted gaps in the agricultural supply chain for fresh produce while running casual vegetarian food chain Greendot.
"Quality was always an issue when we were getting our fresh produce from the night marketplace. Even though we were paying a premium, there were always fluctuations in quality, in price transparency and traceability," he said.
When Mr Chou dived deeper into the supply chain on his visit to a farm in Malaysia, he realised that three to four middlemen were involved in getting fresh produce from a farmer to the restaurants. Each middleman caused a 10 per cent to 25 per cent mark-up in prices, resulting in high premiums for restaurants.
Mr Chou got inspiration from Meicai, a China startup that helps farmers sell vegetables to restaurants by applying technology across the supply chain to reduce the reliance on middlemen.
Glife received pre-seed funding from Quest Ventures, and rolled out a soft-launch of its platform's farm-to-table operations in Singapore in May 2018. Since its inception, the portal has provided more than 150 restaurants with direct access to quality fresh produce from farmers within their ecosystem. "We actually have a better cost structure and are being more price competitive to get customers in," Mr Chou said.
He attributes Glife's ability to source from farmers to its close relationship with the producers.
Glife also has full cold-chain capabilities to ensure that produce is stored at suitable temperatures at every stage of the supply chain. "Our technology is not just in the app purchasing or ordering space. It's about applying the technology throughout the supply chain," said Mr Chou.
The startup currently operates in Singapore and imports mainly from big farms in Malaysia, China and Australia. Funds from the seed round will be used to improve user experience for restaurants through a consolidated invoicing system for perishable goods and greater traceability of produce from farmers, a pilot test on demand logistics technology for last mile delivery fulfilment, as well as to scale and strengthen the technology team in Singapore.
Currently, one of the startup's priorities is building volume of demand for produce, Mr Chou said. "In this business it's all about volume so that is definitely the biggest challenge at the early stage for any startup in this space," he added.
The company plans to scale its operations to Malaysia this year and to begin raising Series A capital in six to nine months for overseas expansion to Malaysia and Indonesia.
In a month, Glife will work to pilot its technology with a cooperative of farmers in Ipoh to improve its ordering app for customers, transport management system, warehouse management system and Enterprise Resource Planning (ERP) platform for farmers.
Mr Chou describes the ERP platform as a "library for farmers" as it stores farmer data on an IT platform.
"That's where we can help farmers farm better. We know what they are adding into their fresh produce and we source from them giving them higher margins," he said.
Another big challenge for Glife will be in convincing farmers to adopt technology to be more efficient, but Mr Chou has an optimistic outlook.
"There is a new batch of younger farmers coming up," he said. "It's how we are going to work with them in the near future to get them excited in the adoption of technology."
On regional opportunities, Mr Chou said while the region is abundant with vegetable distributors, currently few to none are looking at digitalising the process. "There is no dominant agriculture platform in South-east Asia," said Mr Chou.
"There are other small startups but the race is now to be South-east Asia's Meicai."
Glife at a glance
- Founder and CEO: Justin Chou
- Business: Fresh produce logistics firm that connects farmers to restaurants
- HQ: Singapore
- Backers: Global Founders
Capital, 500 Startups,
angel investors such as Royston Tay