The next time you go to a supermarket and see a perfect assortment of glistening fruits and vegetables that are consistently identical in shape, color, and freshness - know that someone (or something) had arranged them to be that way. Though, that was not always the case, especially with seasonal unprocessed vegetables and fruits, where the consumer had to accept what nature offers, whether a product was weirdly shaped, bruised, or even partly consumed by birds and bugs.
Fruit and vegetable assortment has been a long practice in the F&B industry, and the main driver for it is the demand for the 'perfect' product within a capital-driven market, driving further competition between farmers and vendors. Thus, numerous mass producers of vegetables and fruits have started to genetically modify their products, to achieve the perfect balance between having a profitable product that the market wants and maintaining the biological integrity of the product (making apples resistant to a certain type of bacteria, or corn crops adapting to hotter temperatures, etc..).
In practice, fruit and vegetable assortment maintains a certain level of standards for farmers, vendors, and consumers - each getting the best value for their money. On the other side of the spectrum, there have been several campaigns around the world to encourage the consumption of 'ugly fruit', as a way to limit food waste and alleviate world hunger (all fruit and vegetables are beautiful).
Quadra, a Lebanese startup that has recently won first place in the Ideas Track of MIT Enterprise Forum Arab Startup Competition, is an agricultural solution provider with the aim to empower local small-scale farmers and distributors to sort their products from the source. Quadra's technology lies in artificial intelligence (AI) and machine learning (ML) algorithms that categorize fruits based on color, shape, size, and level of ripeness. The data, in this case, is the fruit. Quadra's competitive advantage is in being modular, allowing farmers and distributors to customize their machines depending on their capacity or needs.
We sat with Quadra's team to talk about their journey and what their plans for the future are.
1. How would you describe your journey with Arab Startup Competition?
The Arab Startup Competition (ASC) is a major milestone in Quadra’s startup journey. Unlike any other competition, MIT Enterprise Forum's ASC not only serves as a competition for innovators, but also as an academy for young Arab entrepreneurs to learn the essential skills and tools of turning their ideas into a successful company. Quadra was admitted to the “Ideas Track” of the competition and being at such an early stage meant that there was a lot to learn in such a short period of time. During the two-day bootcamp in Jordan, our team had intensive training with back-to-back sessions about negation, valuation, pitching, and more. The one-on-one sessions with mentors helped us gather the different perspectives and constructive criticism of professionals in the field. The mentors helped us reshape our value proposition and business model to better match our customers’ requirements in an effective way. Moreover, MIT Enterprise Forum serves as a platform for Arab entrepreneurs to network among each other. It was a privilege for us to share our experiences with some of the best startups in the Arab region. It really helped us understand the challenges that we will face later on in our own startup journey and how we can cut shortcuts to avoid any bottlenecks.
2. Why did you apply to the Arab Startup Competition in the first place? Did it meet your expectations?
Quadra applied to ASC for several reasons. Being a startup still at a very early stage means that we require a lot of training and mentorship from experts in the field, as well as funding to launch our idea. But more importantly, Quadra’s primary motive was to expand our network with people who can add value, be it today or in the future, to our startup. ASC certainly met our expectations; it is an honor for us to have gained the title of the MITEF Ideas Track winner as this is already opening up doors of opportunities for our startup.
3. What added value does MITEF Pan Arab bring to the region?
MITEF, being a forum first and foremost, helps startups learn from each other’s challenges, share experiences and opportunities for development, and gain valuable connections. Also, the network of experts and mentors that surrounded us throughout the competition is a lifetime value for every startup. As the chair, Mrs. Hala Fadel, said in her welcome speech, “we are all a part of the MITEF family now” and this by itself is a major win for every startup.
4. Pitch your business to a 5-year old child
After being picked from trees, fruits and vegetables are washed, sorted according to their size, color, and quality, and packaged at package houses. Sorting determines the rightful price and the right market to which packaged fruits should be sold. Worldwide, the sorting process is done on optical sorting machines which can cost up to millions of dollars for advanced machines. However, package house owners in the MENA region cannot afford such expensive machines from international manufacturers. Instead, they have no choice but to sort fruits by hand which is inefficient and inaccurate, leaving them unable to sell fruits in more profitable, high-standard markets. Quadra automates sorting by providing package houses with fruit sorting machines that are affordable at a fraction of competitor machines’ prices, modular machines that can be easily expanded to sort more fruits and at a higher productivity later on, and customized to accurately match the package house’s current sorting requirements all while sorting at the international standards.
5. What is your revenue model? Have you taken any previous funding? If yes, from who?
Quadra’s revenue model is as follows:
Direct Sales of Machines
- 3 tons/hr machine
- 6 tons/hr machine
Renting/leasing of Machine
- 3 tons/hr machine
- Maintenance contracts
- Servicing of machines
- Software upgrade for addition of new fruit
- Capacity upgrade from 3 tons/hr to 6 tons/hr
Quadra is currently part of the Agrytech accelerator under Berytech, where we received cash funding and in-kind support. Moreover, our team recently won the Maroun Chammas Innovation Award, where we received $50,000 in cash funding and mentorship opportunities.
6. What challenges did you face starting up? (team building, convincing others with your idea, market readiness, legal barriers, etc..)
Given that the three of us on the team are from engineering backgrounds, our main challenge was in assessing our market readiness through performing a proper market analysis and developing an appropriate go-to-market strategy. However, with the support of our mentors, we were guided through the process and eventually found a huge potential in Lebanon and in the MENA region.
7. What research/due diligence did you do before launching (data collections, industry trends, market research, etc..)
Our market research consisted of surveying and interviewing more than 150 Lebanese stakeholders in the fruit and vegetable value chain such as farmers, traders, and package house owners. We also researched about the global trend of fruit sorting machinery in the world where we found that there is a fast-growing trend for sorting machines, and then we validated that the MENA region and Lebanon are following that trend as well. In addition, we attended global exhibitions such as the Fruit Logistica in Berlin to understand who the big players in our market are and what are their value propositions to customers, the AgriteQ exhibition in Qatar to understand the need for post-harvest machinery in the Gulf area, and local exhibitions in Lebanon such as Horeca to validate our data and gather more leads in the Lebanese pilot market.
8. What is Quadra's next step after 1, 5, or 10 years?
During the first year, Quadra aims to pilot its first apple sorting machine in Lebanon where we will validate our product’s viability in our home country. Next, we will enter the market of neighboring countries in the Middle East such as Jordan, Syria, and Egypt. In 5 years, Quadra aims to reach most countries in the MENA region and some countries in Eastern Europe, Southern Africa, and Asia. By then, Quadra aims to be the market leader in the Arab market. In 10 years, Quadra aims to reach the global market.
9. How will you use the prize money to advance your project?
Our operational costs for launching the first machine are quite high during the first year. Thus, the prize money will be used primarily to cover part of these operational costs. This seed money will help us greatly in accelerating the launching of our product in the Lebanese market by Q4 of this year.