Using AI + Internet of Things to diagnose supply chain risks, American startup Paxafe received US$2.25 million in seed round financing

Using AI + Internet of Things to diagnose supply chain risks, American startup Paxafe received US$2.25 million in seed round financing

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According to foreign media VentureBeat, American artificial intelligence and machine learning startup Paxafe has recently received a seed round of 2.25 million US dollars. This round of financing was led by Ubiquity Ventures, with participation from Sure Ventures, Fintech Ventures Fund and Greenlight Re Innovations. Up to now, Paxafe’s total financing exceeds 3 million US dollars.

Paxafe was founded in 2018 by Ashok Seetharam and Ilya Preston and is headquartered in Wisconsin, USA. Paxafe is a platform that uses artificial intelligence and machine learning to process supply chain data. It aims to integrate the prediction of route conditions, cargo arrival time and potential hazardous events for B2B transportation scenarios, and realize smart cargo insurance.

Paxafe uses a combination of AI, IoT sensors and risk models to provide insurance pricing for goods based on actual freight risks, covering land, sea and air transportation.According to Paxafe, its insurance calculations integrate key supply chain factors and variables such as weather and traffic, including product types, number of stops along the way, transportation time, and transportation methods. The software can convert sensor data into contextualized information, send notifications at each key transportation node, allow real-time viewing of the status of the goods, and issue an alarm when there is a potential deviation of the goods, automatically perform claim diagnosis and cause analysis, and maximize the stop loss.

Image source | Unsplash

In the past few decades, the pain point of the global supply chain has been the lack of visibility, which has led to high loss rates and low transportation efficiency. Nowadays, visualized cargo tracking platforms are everywhere. Sensors, ELD (Electronic Recorder), etc. are widely used in the transportation chain, but the rate of cargo loss has not improved. According to data from Cloudleaf and Sapio Research, in the pharmaceutical supply chain, temperature-controlled logistics alone is worth $35 billion in annual losses. Among companies with high-performance supply chains, 79% of companies have revenue growth higher than the industry average.

Currently, most of the solutions on the market are similar to fire detectors-once a problem occurs, the detector will sound an alarm.The disadvantage of this model is that it can only respond passively after a loss occurs, it cannot diagnose the logic and cause of the problem, and it cannot predict the probability of a potential problem.The innovation of the Paxafe system lies in the use of precise automated diagnosis to help shippers establish a universal predictive model to reduce the supply chain risk of future freight.

The supply chain is facing greater challenges during the epidemic, especially for vaccine transportation, a complete and controllable supply chain is essential.The strict requirements of the vaccine itself for product integrity, transportation conditions, and delivery time have led to a surge in global demand for visualized supply chains.

In the past six months, Paxafe has launched a series of fee-paying pilots with leading companies in vertical fields such as healthcare, perishables, oil and gas, logistics, manufacturing, jewelry and insurance. Recently, the company also launched a commercial version of its platform, transforming about 10 pilot customers into business partners. Paxafe intends to use the new funding to optimize AI-driven predictive models, while accelerating the promotion of its business platform to more corporate customers.

Editor | Chen Shuya


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