This innovative start-up aims to crack the counterfeit conundrum
Ennoventure, an innovative tech start-up has designed a unique solution which gives power directly to the consumer to check if the product that they are buying is genuine or not.
Anushruti Singh September 13, 2021
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The easy availability of counterfeit versions of Coca-Cola, Bisleri or Adidas are proof of the fact that counterfeiters have no limitations. You name any sector, be it FMCG, pharma, liquor, apparel, automotive or electronics, they are omnipresent. Even currency can be duplicated, as the counterfeiters are becoming smarter and more organised.
It is a global menace and estimated to be around 3.3 per cent of world trade and this percentage is increasing by the day. In India too, estimates suggest that counterfeiting costs the Indian economy Rs 1 trillion every year, making it one of the fastest growing crimes.
Meanwhile, as people increasingly shop online, the risk of receiving counterfeit goods has skyrocketed. In fact, one in three citizens have become victims of this fake products racket while shopping online, states an ASPA report on counterfeiting.
Data also shows that in the last three years (2018-20), reports of such counterfeit incidents have surged by 20 per cent. This only emphasises the fact that counterfeiting is a major issue in India.
After having Identified this gap, desiring to solve this problem, and seeing a huge potential for themselves as anti-counterfeit agents, Ennoventure Inc, a new age tech start-up, has developed and patented an innovative solution in response to this global issue. “Counterfeits are very much everywhere,” says Padmakumar Nair, an MIT Sloan School of Management alumnus and Co-Founder & CEO of this SaaS platform.
And it is only increasing, “The COVID-19 crisis accelerated the demand for contactless purchases and delivery methods. While going digital has numerous benefits, this has also increased the risk of counterfeit products being widely marketed, many of which are almost impossible to detect,” he says.
Simultaneously, internet penetration in India has reached an all-time high, implying that an increasing number of Indians are keeping themselves abreast of the latest data. Which also means that there is an increasing urge within consumers to know if they are buying genuine products.
Advances in computer vision and machine learning have also made it easy to replicate the designs of the product- packaging of various well-known brands, making it extremely difficult for consumers to determine the authenticity of these products. At the same time, companies are heavily investing in anti-counterfeit technologies to combat this threat, but so far these have failed to reach the end consumers.
And this is where Ennoventure’s solution comes in.
“There are in fact a number of sticker-based technologies available in the market, but they lack transparency and reliability,” says Nair. According to him, to combat the counterfeit issues across industries, companies need to adopt sophisticated technologies that ensure trust, transparency and integrity for its stakeholders.
“So far, anti-counterfeit technology has remained in the hands of the company selling the products. We, at Ennoventure seek to shift the balance of power to the consumer through our patented technology that anyone with a smartphone can access on the go,’ he further remarks.
With its headquarters in Massachusetts, USA and an R&D centre in Bengaluru, India, the start-up has patented their digital technology of encryption (without any process change). Using technologies like AI, cryptography, blockchain and geofencing, the start-up claims that their solution is a first in the world device agnostic anti-counterfeit tracking solution, that too in the packaging space.
“In India, there remains a great risk of such counterfeiting across sectors like pharmaceuticals, FMCG, automotives and alcohol. This opportunity was identified and a solution was then ideated that can be patented and is one that is unique and non-disruptive for brands. The solution is invisible (covert) but can be easily authenticated with the help of a smartphone sans expensive scanners,” Nair elaborates.
Ennoventure Inc was started in 2018 by Padmakumar Nair and Shalini V Nair.
When asked about the idea behind their start-up, Nair tells us that it was their problem-solving attitude that led them to form this company. “With an aim to combat the problems that are faced from counterfeiting related challenges in the packaging industry, Ennoventure developed a solution that could verify the authenticity of product packages. That too in a non-disruptive manner without changing the brand’s existing package design and printing process,” he avers.
They named this solution ‘Enncrypto’ and it addresses the issue of counterfeiting across the globe.
Sharing the journey of the start-up, Nair tells us that it was him that connected with Shalini V Nair with the idea to build a software tool to mitigate this problem. “Early in 2017, Shalini V Nair was running her own start-up when I connected with her to embark on the foundation of Ennoventure. Fast forward to a few months after our first call and we both co-founded Ennoventure,” he reminisces.
By August 2018, Shalini, who is also the CTO of Ennoventure, applied for two patents in the US. One for the verification of the authenticity of products using smartphones by scanning labels, which contain an invisible cryptographic code. And the second pertained to its design and how the cryptographic code for a particular design would be optimised.
“One patent was granted in November 2018 and the other one was granted in February 2019,” says Nair.
So far, Ennoventure’s solution has been recognised by Microsoft for Start-ups, allowing it to be listed on Microsoft’s Azure marketplace. It was named a promising global start-up in the AI field by the Dubai Future Foundation in 2020. It was also recently accepted into the Cambridge Innovation Centre in Boston.
The start-up has also joined the International Anti-Counterfeiting Coalition (IACC), with the goal of reinforcing its commitment to the fight against product counterfeiting and privacy, providing relevant solutions across geographies by leveraging its technological competence.
Also, as a start-up Ennoventure was recently recognised as one of the most innovative businesses among 24 other industry leaders and selected into the Cohort of the Mohammed Bin Rashid Innovation Fund (MBRIF) Accelerator Program. The UAE Ministry of Finance has created the MBRIF project to encourage and support innovation in the UAE.
Challenges on the front
As a start-up, the first few years were very crucial for Ennoventure. Nair states that those years were spent on raising funds from investors and working towards growing as an organisation.
“It took us almost three years of hard work and immense dedication to raise our Series A round, led by the Fenice Investment Group. Similar to other industries across the globe, we were no exception amidst the pandemic that disrupted our journey towards raising funds from investors,” he says.
Another challenge that they continue to face till today is that of inadequate awareness on novel technology, its significance and the need to adopt the same.
Nair strongly feels that it’s absolutely necessary to educate clients about the need for anti-counterfeit solutions and their potential in protecting and authenticating brands, thus helping them to maintain their reputations. Concurrently, he also talks about the lack of professionals in this arena.
“The other challenge that we faced during our elementary years was the dearth of experienced professionals with ample knowledge about anti-counterfeit solutions or the technology used to address issues resulting from counterfeiting. This led us to hiring freshers out of college and providing them training from scratch,” he says.
Delivering smart packaging
Ennoventure has primarily devised ‘Enncrypto’ to address issues in the packaging sector.
Enncrypto is a non-disruptive solution for confirming the authenticity of a product without compromising with the client’s existing package design and manufacturing process.
“Basically, it’s a software solution which will help you to check the validity of product packaging. Its encryption technology combines AI, cryptography, and blockchain to create an invisible encrypted code that counterfeiters won’t be able to read. On several fronts, multiple machine learning models are used to detect questionable signals. A Deep Neural Network, for example, can swiftly detect fake product lookalikes, while blockchain stores the product’s e-pedigree from the manufacturer to the consumer,” Nair explains.
To put it simply, they add invisible crypto signatures into product packaging. Enncrypto has various USPs that make it an affordable and easy to use tracking and tracing solution to determine product originality by converting ordinary packaging into smart packaging.
“Manufacturers leveraging the solution don’t need capex, which means that there is no need to change anything in the production process. Then, no design change or special ink is required for product packaging. The cryptographic signature can’t be copied, hence, its better than QR codes that can be copied easily. The signature can be embedded throughout the package, hence, its better than hologram stickers that can fall off the product. It also works on any printing material including the toughest of all, blisters,” Nair informs us while talking about the solution’s USPs.
When the consumer scans it through their mobile, they can authenticate the product’s originality and can read more information about it. In fact, the signature is geotagging enabled, which can track fakes and parallel imports. “It can be provided on different platforms such as web, app and social media. Besides acting like a tracking mechanism, the signature can work as a brand-engagement tool to serve several purposes along with its anti-counterfeit features,” says Nair.
India is a key market
“Industry has been receptive towards our solution which has ease of implementation and ease of usage at the consumers’ end. However, the fact that there’s no need of capex to implement Enncrypto and that it is completely invisible to the naked eye, makes it a concept that is ‘too hard to believe’,” expresses Nair.
The one-of-a-kind solution developed by Ennoventure can be applied to any industry where counterfeits are a problem. Nair’s company currently has the majority of its customers in India.
“Ennoventure is currently focusing its efforts on companies across diverse industries like FMCG, pharmaceuticals, agro-chemicals and luxury goods,” says Nair.
However, they lay special emphasis on tracking fake pharma and FMCG products.
“Counterfeit medicines are a cause of major concern. Ironically, it is reported that more than 30 per cent of the drugs we buy online are fake, resulting in the potential death of over a million people from counterfeit drugs,” he elaborates. Furthermore, minor differences in composition can result in serious health issues, permanently tarnishing the pharma company’s reputation.
“Similarly, the FMCG sector is another vulnerable industry that has been affected by counterfeit products. According to a report by FICCI, 30 per cent of the FCMG goods sold in India are fake. A number of other reports suggest that counterfeit products across industries are responsible for creating a hole of Rs 1 lakh crore every year in the economy,” Nair avers.
“We are associated with leading FMCG brands and generic drug manufacturers in India and hope to expand our clientele as we move forward on our growth journey,” he further adds.
Touting India as a key market, Nair points out that the recent funding of $5 million which they have gained will help them to reach out to many more organisations and will also enable them to expand their operations even further. “We aim to utilise this capital towards expanding our team and our go-to-market strategy across key markets globally. As part of our growth strategy, we are currently focusing our efforts on pharmaceutical companies in India as it is a key market for the export of generic drugs and we further plan to expand to the European and US markets in the near future,” he concludes.