Bext360 is using robots and the blockchain to pay coffee farmers fairly

Coffee is the world’s second-most-traded commodity, after petroleum. Some 125 million people make a living growing coffee, according to estimates from the Fairtrade Foundation. Most are smallholders, or small-scale farmers whose families live on less than $2 a day, the World Bank reports. Now, a Denver-based startup called Bext Holdings Inc. wants to make it easier for these farmers to get a fair price, and get paid instantly, for their beans.

The company built a mobile robot that is something like a sophisticated scale. It allows buyers of coffee to rapidly analyze the quality of and weigh a farmer’s product in the field. The robot uses optical sorting to understand what percent of coffee cherries look perfect or spoiled in a batch. A batch, typically a 30-40 lb. bag, will get higher or lower marks, which are revealed to both buyers and farmers on the spot. They then negotiate a fair price through bext360’s mobile app.

The startup’s app and cloud-based software employ blockchain technology from to create a record of where beans came from, and who paid what for them. Ultimately, founder and CEO Daniel Jones said he believes that coffee drinkers should be able to know, down to the cup, where their coffee came from and whether or not farmers were paid a fair rate for it.

“Consumers are more enlightened than ever before. And companies want to meet their high standards,” Jones said. “But in general, groups working on fair trade spend a lot of overhead on tracing materials. They use rudimentary tracing mechanisms. And it’s very imprecise. People in the field can still get exploited.” The CEO’s goal is to bring complete transparency to the coffee supply chain, and other commodities as well, including cocoa, he said.

Prior to getting into agriculture tech, Jones founded a company that exported minerals from the Democratic Republic of the Congo (DRC) to the U.S., meeting all the supply chain and traceability requirements of the Dodd-Frank Act. He also worked with the Defense Intelligence Agency to create a communications system for transferring voice, video and data across top-secret networks. In other words, Jones knows how to get businesses in developing nations to work with and benefit from clients in the west. And he’s not afraid of dealing with bureaucracy.

To support its launch and growth, bext360 has raised $1.2 million in seed funding from SKS Venture Partners, a family office that mainly invests in financial technologies. Bext360 investor Mark Spencer said “Using a smart phone to pass payments through to farmers directly, cutting out middlemen who too often take more than their fair share of any transaction, is what caught our attention.”