When the Covid-19 pandemic struck the world last year, digitally enabled supply chain networks became the most sought-after businesses the world over. Companies which had painstakingly invested in building elaborate physical networks had little choice but to embrace digital solutions. Their biggest challenge was to make their products available to their consumers. However, a digital supply chain network did not mean just taking orders from a retailer or a distributor online or being able to trace inventory through an app. It also involved serious interventions through technologies such as blockchain, artificial intelligence and cloud to monitor the quality and traceability of each and every product.

Lumis Partners, an operating investment fund—which has a dedicated supply chain technology vertical in India, where it not just invests in digital supply chain start-ups but also helps them scale up—claims that over 80% of the 20-odd supply chain start-ups it has invested in, have seen a 2.3 times expansion in valuation in the last one year. “Since supply chain has been so fundamental to all our lives through Covid-19, these companies are reaping the benefits,” says Rohit Bhayana, co-founder and managing partner, Lumis Partners.

As part of its initiative to invest in new-age supply chain start-ups, Lumis since the past two years has been running supply chain cohorts through which it identifies 10 digital supply chain start-ups every year and puts them through a six-month programme—wherein they are trained by professionals from MIT and other leading organisations. The plan is to invest and scale-up 50 such start-ups. “We will have 50 of the country’s best supply chain companies which will innovate and disrupt in various dimensions of supply chain such as food, pharma and other consumer-related sectors, they would be very deep in artificial intelligence, blockchain, immersive technology (AR VR), authentication and tracing. These five-six technologies will allow end-to-end visibility in supply chain assets,” says Bhayana.

One of Lumis’ most successful investments is qZense Labs—which helps a food company to monitor the quality of its fruits, vegetables and meats. Run by two women entrepreneurs, qZense has created an IoT device, which has an olfactory sense. This device sits on a quality conveyor belt which monitors the quality of the products. “When you use conventional technology in a food supply chain where thousands of tons of mangoes are going for export, you can’t pick up each and every mango and see which is good or bad on a running conveyor belt. The IoT device not just scans the outside but also smells the product inside,” tells Bhayana. qZense—he adds—has recently tied up with the supply chain arm of Reliance Fresh.

Lumis has also invested in Statwig Technology—a blockchain technology firm which has created an authentication mechanism for WHO to trace every vial of vaccine. “They are present in the vaccine ledger and that’s how they are able to track. They made that a success and after that they got a grant from UNICEF and also from MIT,” says Bhayana. They have recently partnered with Tech Mahindra to take their technology to Tech Mahindra’s pharma clients.

India is over-dependent on its physical supply chain infrastructure which is dated. Bhayana hopes that Lumis’ investments in tech-based supply chain start-ups will play an important role in helping the country leapfrog. He sees a huge opportunity. “We are not just 20-30 years behind, we are also inefficient. India spends 14% of its GDP on supply chain while China spends 12 %. So, if we bring it down to 12% of the GDP, 2% on a $2 trillion economy is a $40 billion opportunity.”

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