After insurtech and fintech, Newralers applies AI to winemaking
Spain · Sep 24, 2019· By Amalia González
Newralers' Chief Technical Advisor and co-founder Julio Alfaro Martín © CompassList
Newralers expects strong demand for its disruptive AI solutions that test the cognitive value of information, with clients from listed companies to SMEs
It made its name in insurtech and fintech, and now AI solutions startup Newralers has expanded into agtech, too. It has launched Newralwine, an AI-based system that processes data in winemaking to improve the process and resultant quality of wine, including reducing elevated levels of alcohol sometimes found in wine due to effects from climate change.
Founded two years ago, Newralers quickly gained recognition for its brain-inspired AI computing that is capable of extracting and processing huge amounts of data from natural human language more quickly and easily than the human brain, and with cognitive models that solve problems and give recommendations. The company won the Cybersecurity Ventures 2018 for its AI fraud detection technology and the 2019 German-Spanish Chamber of Commerce IV Piosphere Award for its solutions to the Rödl & Partner challenge.
It's perhaps not surprising that Newralers, since it's based in the major Spanish wine-producing region of La Rioja, has turned its attention to the problem rising temperatures are causing in winemaking. Many wine-producing regions have noted increases in grapes' sugar concentration, resulting in potential alcohol elevation of 1% to 2%. Newralers has developed a set of AI-based hardware for winemaking that is capable of reducing the alcohol content while maintaining the organoleptic qualities of wine.
Although Spanish winemakers like Legaris or the Codorniu Group have long produced wines with relatively high alcohol content – up to 15% – the prospect of the alcohol level reaching 16% has attracted them to Newralers' latest technological offering. The tool is also capable of predicting grape quality or the suitable phenolic point for harvest, facilitating segmental collection on different dates. A small device placed in the barrel stopper, it can also control the malolactic fermentation (the transformation of malic acid into lactic acid) inside oak barrels.
Newralers' Chief Technical Advisor and co-founder Julio Alfaro Martín spoke with CompassList at the Smart Agrifood Summit in Malaga, where the company presented its product for winemaking.
This interview has been translated from Spanish and edited for length and clarity.
Q. What inspired you to create Newralers?
I am a serial entrepreneur. Twenty years ago I focused on AI technology developments producing prediction and recommendation engines. My partner and the company's CEO, Xavier Capellades Sesé, and I founded Newralers on June 4, 2017. Capellades had worked for 20 years at IBM and other technology-related companies and is also my partner in Formavolución S.L., a company offering AI services for human resources, job placement, and skill-learning management, which we founded in 2012.
Newralers benefits from 15 years of accumulated experience in AI across different verticals and markets. We had our own AI development before the big data platforms existed and when they began to appear, we focused on improving their accuracy to meet customers' needs.
What have been Newralers’ main difficulties?
The biggest handicaps are financing and the large market players such as Acciona, Bankia and Walter Kluwerm have slow decision-making processes that can take up to 16 months from order to payment, which can hinder cashflow management for small companies like us.
What is your business model?
The core of our business is focused on cognitive knowledge management. Therefore, we adapt to customer requirements. While working for large fintech or insurtech companies we usually bill the customized implementation and for our services, following a SaaS model. We use corporate culture resources to improve company productivity by allowing any user to "remember" everything inside the company with immediate access as if s/he had an “infinite exomemory.”
In agtech, we initially charge the customers for the kit that needs to be installed in the tanks, then we bill for the AI used to control the winemaking processes from vinification to the sugar transformation process into alcohol through yeast as SaaS. Newralers controls the parameters of the process during winemaking and is in charge of injecting oxygen nanoparticles that intoxicate the yeast to ensure lower alcohol production.
What kind of technology(ies) do you use?
We are an AI development company that works on any deep learning platform like IBM Cloud, Microsoft Azure, Amazon, or Google cloud, adding value with our own technology for our customers. In addition, we interconnect different platforms to optimize scientist data performance. Finally, our engine executes a cleaning to meet customer needs.
What are your sales figures?
I don’t think that Newralers' turnover will exceed €400,000 or €500,000 this year which is about a fourth of what we could be doing. Currently we have an orders funnel of €1.5m to €2m. The process could be expedited with more funding and specialized marketing investment.
Are you planning to open any funding rounds?
I have invested all my capital in Newralers. Total investment in the company would approach €1m. We have opened an investment round of €200,000 to €300,000 and we will probably accept a loan from the European Union Agency for Cybersecurity, or ENISA, to obtain the resources to reach a €3m round a little later.
For this future round, we are already negotiating with four investment funds. Our objective is to develop more efficient campaigns, increase our technical team, expand our orders funnel to €6m to €7m and reach €1m to €2m revenue next year. We project a €30m Series A round in less than five years.
What kind of customers are you targeting?
Right now we are targeting large banking, insurance and Ibex 35 companies, but we are developing a platform that makes our technology accessible to any SME too via SaaS.
Our smart chatbot assistants are based on cognitive value keywords and can access all the available information to solve a given problem in real-time by listening to a conversation or answering a question, without perceived delays compared to human operators.
What are Newralers' short-, medium- and long-term projections?
Newralers has very strong growth potential since everything related to AI, both software and hardware, is growing. In the case of Newralers, our tools are mainly oriented to information management.
It is important to highlight how information is growing all over the planet. AI and tools like ours can provide a solution to extracting the appropriate answer to a given question from the huge amount of information that exists. Our technology is getting better results because it is not based on semantic parameters as most AI tech is. Newralers heavily relies on fuzzy logic, using a different computational process, and it works.
We have developed a disruptive technology to efficiently test the cognitive value of information that has been validated by our clients such as Acciona and Bankia. Now we have to scale it and finish our platform so that any SME can access these services.
Edited by Sophie Douez
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