Look at any agricultural field in America, and you will see row after row of seemingly identical crops. Whether it be apples, corn, potatoes, or artichokes, the myriad of growth seems unending. Looking at such a field, it can be hard to imagine that 1.3 billion tons of that food were lost last year. In fact, a recent study shows that the average American household wastes $2,500 worth of food each year. So how do we put a stop to the staggering statistics behind food waste? First, by creating a way to assess the freshness of foods in the supply chain so that growers can better estimate their lifespans. Second, by helping consumers identify which foods are in danger of spoiling and should be used first. With groundbreaking new technology, C2Sense is doing just that.
Using sophisticated sensors that can detect ethylene and biogenic amines, C2Sense has developed a process to test the ripeness of fruits, as well as the freshness of various meats and poultries. This technology will aid consumers and distributors alike in making informed decisions about tackling the problem of waste. An added bonus? It will help improve the quality of your food.
Propel(x) recently spoke with Jan Schnorr, founder and Chief Technology Officer of C2Sense about his company, raising their Seed Round and C2Sense’s recent funding of $350,000 by the Thiel’s Foundation Breakout Labs.
Propel(x): Tell us about C2Sense.
Jan Schnorr: What we are trying to do, in a broad sense, is to bridge the gap between the real world and the digital world. If you look at your phone, it has a nice camera, a microphone and physical sensors, but it doesn’t really have a sense of smell or taste. And that’s a real problem in many, many fields. The one field we’re focusing on is to bring sensors that can take chemical information, and make it digital to help with food distribution and agriculture. For example, you can take ethylene, which is one of the chemicals that fruit gives off as it ripens, and by measuring the amount of chemical that the fruit is producing, you can estimate its ripeness. So now you can use that information in the field to know when to pick the fruit or use that information in the store to make sure things sell before they spoil.
Propel(x): Where are you with the technology?
Jan Schnorr: We launched the company in the beginning of 2014, and are developing [the technology] right now. We did a field test with a company in the supply chain under real-world conditions that looked very promising. In terms of timing we expect to have a commercial product in 2017.
Propel(x): I understand you recently closed a round. Can you walk me through your funding process?
Jan Schnorr: I think there are three big events with our funding that happened after we started working with Propel(x). The first was closing the angel round with Propel(x)’s help at the end of March of 2015. Propel(x) helped even with those investors who we’d already been in touch with by streamlining the process, especially by consolidating the questions these investors had and helping us get timely answers back. The second part was an introduction through Propel(x) to Peter Thiel’s Breakout Labs. And then the last thing is an equity round that we just closed on the 21st of August.
Propel(x): What were some of the challenges and advantages in the fundraising process that came up due to the fact that you are a deep technology, science-based company?
Jan Schnorr: I would say one challenge just from the start is that, compared to let’s say a company that builds an app or anything in the software space, you have a bit more of a burn rate. So that’s a risk and a challenge in and of itself. And of course for a technology company, you’re not looking at an exit in one year, and some investors might be interested in shorter timeframes, so that can be a challenge.
I think in terms of advantages, there are some investors who are becoming interested again in hardware type companies, who actively make the choice to look for people who are building something. These investors are a very good fit for us of course because they make this active choice, they know what to expect or what to not to expect from companies like us.
Propel(x): Did you have concerns about using a platform like Propel(x) going into it?
Jan Schnorr: For us, it was always a question of how much to share or not to share. We asked ourselves this question in terms of which slides to use for the Propel(x) presentation, but also as a result of the presentation being recorded and then accessible to people on Propel(x) where you don’t have a lot of control or visibility as a company who’s watching that presentation. So it was a little bit of a new situation, nothing that’s impossible to get used to, but that was a question.
Propel(x): Do you think the due diligence process you went through on Propel(x) helped facilitate your fundraising process?
Jan Schnorr: Yes, absolutely. I think that made a huge difference. We like working with angel investors because they bring in some different angles, different ideas. I think it has also helped tremendously to have Propel(x) bundle questions, direct them to us, and then having one streamlined process. I really like the background research that added some additional independent information on top of what we provided. So I do think that really helped speed things up, and not only in terms of how the time it took to close, but also in terms of how much attention we had to pay. It can be easy to underestimate how much of your attention it actually takes to communicate with investors, to convince them that it’s a good fit, and to find out if it’s a good fit from your side. So there Propel(x) was very, very helpful.
Propel(x): What tips do you have for other deep technology startups when it comes to fundraising, based on this recent experience?
Jan Schnorr: I think it’s important to find people who like working with your type of company. It’s also important to think early about how to prove that you’re on the right track. A lot of investors have a good feeling if a certain product might have market potential, but it’s sometimes hard to judge or to distinguish a deep technology startup with a very solid base from one that’s just big promises. So trying to find a way to prove to the investor that there’s actually some substance to your startup is important.
Propel(x): Now 10 years from now, C2Sense is a huge success. How will society be impacted due to that great success?
Jan Schnorr: It’s going to change how people think about the world around them. Currently, there’s a gap between the real world and the digital world, and I think C2Sense can help bridge that gap. So now suddenly you can use your phone to help you decide what to cook because it can interact with your food. A worker can be better protected because you can know what dangerous chemicals he might be exposed to. And in the end, if we can reduce the 1.3 billion pounds of waste, just a tiny bit, I think that by itself is worthwhile.