Generation Start-up: How Abu Dhabi’s Verofax is helping companies combat counterfeiting
20 December, 2020
There can be no good without evil. The globalisation of trade and the rapid proliferation of e-commerce and social media have boosted the capability of organised criminals to sell fake goods with greater speed and efficacy.
For entrepreneurs Wassim Merheby and Jamil Zablah, the co-founders of blockchain-based traceability start-up Verofax, this is as an chance to “fill market gaps” and “empower businesses and consumers”.
Abu Dhabi-based Verofax offers a unique solution to businesses looking for compliance and brand protection, including serialisation, traceability and anti-counterfeiting solutions. All products are blockchain registered to avoid forging and tampering.
“Not merely authenticity … however the high quality characteristics, such as for example ‘organic’ or ‘sustainability’, can even be verified through Verofax,” Mr Merheby, 49, tells The National.
“Manufacturers offering validation can enhance sales, reduce negative ratings … whereas, consumers will feel confident and safe when making purchases,” Mr Merheby, a serial entrepreneur from Lebanon, who has worked with companies such as for example Nokia, Microsoft and Nestle, says.
Users may also trace the product’s condition in transit and check inventory receipts.
Blockchain is an electronic chain of transactions that are associated with each other using cryptography - a mechanism for secure communications - on an open ledger. The database is a real-time library of records that are difficult to tamper with since each change creates a fresh record.
Using Verofax’s blockchain technology, retailers and manufacturers can create a unique identity of their products, in the form of an instant Response (QR) code or a barcode, which can be scanned to verify authenticity.
It traces the product’s complete lifecycle - from the sourcing of recycleables to post-sale user engagement that allow businesses to get insightful feedback.
Founded in December 2018 at Abu Dhabi Global Market with a short investment of $250,000, Verofax has billed near $200,000 thus far.
Currently, the business is working with only select businesses on the “bespoke products”, Mr Zablah, 43, a Jordanian-Australian says.
It'll push out the consumer version of the iphone app in the UAE in the first quarter of 2021, accompanied by a rollout in Saudi Arabia in the next quarter.
“Verofax helps pharmaceuticals and other consumer goods manufacturers to meet evolving product traceability regulations and growing consumer demand for product safety, security and legitimacy … boosting rely upon their brand,” Mr Zablah says.
“We are helping companies to create ethical together with responsible brands … helping governments to control quality standards, compliance requirements and making duty and tax collection a seamless process,” he adds.
How much counterfeiting worldwide totalled $1.2 trillion in 2017, which is defined to attain $1.82tn by the finish of this year, mostly as a result of rise in e-commerce platforms, according to a 2018 Global Brand Counterfeiting Report.
In comparison, the global traceability and brand protection market is estimated to attain $55 billion by 2025, with food traceability alone accounting for $22bn, according to Verofax’s own estimates.
Businesses can sign up to Verofax’s monthly or yearly plans based on their product category and on the number of items they produce.
“The process is very simple. They [businesses] just need to head to our site, sign up to our service, upload product details, certifications and begin,” Mr Zablah says.
The Covid-19 pandemic upended a few of Verofax’s plans for this year. Though it delayed the business's fund raising activities, the start-up's business slowly but surely increased.
“The impact was very negative during the early days of the pandemic, nonetheless it turned positive after [a] couple of months,” Mr Merheby says.
Verofax was touching potential investors in Hong Kong, who had focused on a big investment round. But they went into quarantine in January and stopped all communication.
“By enough time we terminated our agreement with the Hong Kong investors and started exploring this the main world, it was already March and nobody was hearing us,” Mr Merheby says.
“It harmed us a whole lot between March and June … nobody wished to engage … we thought that the complete business was at risk. But things rebounded from July ... everyone started talking about the value of validating supply chains as [the] manufacturing of Covid-19 vaccine was on,” Mr Zablah explains.
Verofax has closed half of a planned $1 million round.
“Our investors include a UK-based capital raising firm, a Canadian company and a British-Indian investor,” Mr Zablah says, adding that Verofax expects to secure the rest of the $500,000 by end of this month or in early January.
With the launch of the buyer side of the application early next year, Verofax expects a boost in earnings and hopes to breakeven by the first half of 2021.
“We'd to delay our Saudi launch because of Covid-19 … now we are scaling up extremely fast and hope to make profit by the end of next year,” Mr Merheby says.
The co-founders say there is a point if they were contemplating an early exit but their plan changed after the launch of Nasdaq Dubai Growth Market in October, a new exchange that aims to help small, fast-growing companies usage of capital markets.
“Before this announcement, we were open for an exit if we found a good investor. Now things have changed … we are looking to can get on Nasdaq, get listed regionally and grow our business further,” says Mr Merheby.
The market, which will be operated by Nasdaq Dubai, allows small and medium-sized companies to market shares through initial public offerings and has been established as part of the Dubai Future District initiative.
Verofax, that includes a workforce of six employees in Abu Dhabi, plans to employ more persons in 2021 in various geographies since it expands its business.
“We are hiring across Asia, Africa and Middle East. Our business design is different," Mr Merheby says. "We must have persons on ground to accomplish in-person meetings and present product demos. We also need staff to run call centres in local languages.”
Verofax recently signed an agreement with Auri, a Kuala Lumpur-headquartered lifestyle brand, to jointly launch its traceability app across Asia. It expects wider adoption by suppliers of fashion and lifestyle products in the Asian market in the first quarter of next year.
The company happens to be in the process of finalising a licensing agreement with an undisclosed partner in Africa and you will be hiring staff there as well.
Headcount in Asia will almost double to 12 and in Abu Dhabi it will rise to 18.
Verofax is also dealing with Abu Dhabi health authorities to create traceability technologies to control the safe delivery of medicines in the emirate.
“We've received a letter of support from the Department of Health, Abu Dhabi, and so are working with them to build up innovative products. We've received a similar letter of support from the NHIC [National Health Information Centre], Saudi Arabia, and soon we begins our work there,” Mr Merheby says.
Source: www.thenationalnews.com
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