Startup

Pune-based NeuroTags is waging war against counterfeit products using AI

Sameer Ranjan
21st Aug 2018
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The bootstrapped company uses Artificial Intelligence and Machine Learning to help brands and manufacturers track supply chain and arrest the flow of counterfeit goods.

From internet-savvy youngsters to senior citizens, everyone is shopping online. However, as ecommerce grows, there comes the problem of counterfeit products. With an aim to find a digital solution to detect counterfeits, Nitin Gupta, Yogesh Miharia, and Abhishek Agarwal set up NeuroTags in Pune in 2017.

Co-founders of NeuroTags - Yogesh Miharia, Nitin Gupta and Abhishek Agarwal (From left to right).

Using Artificial Intelligence (AI), the startup aims to do away with radio-frequency identification (RFID) tags and holograms that are usually used to detect counterfeits.

Holograms (three-dimensional image formed by the interference of light beams) are affordable, but are easily replicable. On the other hand, RFIDs, that use radio waves to read and capture information stored on a tag attached to an object, are expensive with a tag cost varying from Rs 10 to Rs 150 apiece.

Nitin Gupta, Co-founder, CEO and CTO says, “Without digital solutions in place, the manufacturing and retail industry loses an astronomical amount.”

Early days

“The idea of NeuroTags came to us while all of us were watching a documentary on the counterfeit market. It made us realise the enormity of the issue. Our immediate thought was, ‘Why can’t we solve this with the help of technology, which is our main strength?’” says Nitin.

“After thorough research about the market and the solutions and technology in place, and a few brainstorming sessions, we came up with the technological solution - NeuroTags,” he adds.

The initial challenge was from customers themselves. Recalls Nitin, “Our customers had been using holograms and RFIDs and so they were initially reluctant to try our tags. But as we offered them paperless warranty, loyalty and referral programmes, they opened up to our solutions.”

How does it work?

The problem of counterfeiting arises because companies and brands are not able to track their own supply chain in the market and collect their end-consumer data. As such, the distribution network remains dark.

NeuroTags uses algorithms and AI to build mathematically coupled tags - open and protected. The open tag goes on the external cover or package and can be scanned by anyone with a smartphone to get information on the product, and is an indication of the authenticity (with a certain probability).

Scanning the protected tags

“The scanning of the open tag indicates that the product has been sold. Once the product is purchased, the buyer has access to the protected tag that lies inside the product seal,” Nitin explains.

“After scanning the protected tag, the consumer gets the authenticity information, and the product gets registered to the buyer automatically. As the package is tracked using IP addresses or GPS, when the consumer scans the protected tag with their mobile phone, the scanned code is sent to an AI-based server. The AI system tracks the place where the protected tag and the open tag were scanned, along with the route taken to reach the end-consumer,” says Nitin.

"The end-user can also avail of warranty, loyalty and referral points after scanning this tag. The tags are connected, monitored and protected by algorithms and AI on the server in such a way that if anyone tries to replicate the tags, it gets tracked and the copied product tags get invalidated,” adds Nitin.

Nitin says, “Generally, when fraudsters copy a tag, they will copy one tag for more than 10,000 copies. For them, the economy of scale works. They can’t just make a single copy of a tag. When a protected tag is opened for the first time, the system records it. The copied tags generated further will be invalidated by the NeuroTags system.”

The team

The startup is currently an 18-member team, including the three co-founders.

Nitin was a tech manager and a security expert with experience at IT giants like Yahoo, PayPal, and eBay. Nitin is responsible for the overall business, software, and tech space at NeuroTags. Yogesh is Chief Sales Officer, managing overall sales and initiating business leads. Yogesh has earlier worked with IT major Cognizant. Abhishek is COO and responsible for communicating with clients and managing the team. He also takes care of post-sales support.

Team at NeuroTags

Revenue and funding

Currently bootstrapped, the startup is exploring plans of raising external funding. Nitin says, “We launched the product in January 2018, and in the last seven months, we have bagged six clients in India. We are also in talks with many international brands and are in the final phase of starting pilots for some of them. Our revenue has been reasonable, and our current focus is mainly on scaling.” The startup uses pay-per-use model, which is economical for businesses.

Competition and differentiating factor

On what sets them apart from their competitors, Nitin replies, “It is our technology that truly eliminates the counterfeit in the most effective way. Our technology is open to every industry falling in any market-size because of our cost-effective services.”

Neurotag’s competitors include Sproxil, Trutag, SigmaLedger, and Block Verified. Some of these are based on Blockchain and some provide old methods like the track and trace solution.

Future plans 

Counterfeit goods are estimated to drain more than $1.6 trillion from the global economy, a figure that is slated to climb $4.2 trillion by 2022, as per International Chamber of Commerce’s Business Action to Stop Counterfeiting and Piracy (BASCAP) report. The market for fakes in India, meanwhile, is estimated at around Rs 40,000 crore annually, and is growing very rapidly, as per Authentication Solutions Providers Association (ASPA).

“We are already working with some of the key companies in India. We are also in talks with some of the top brands and are setting our bases in strategic geographies across the globe,” says Nitin.

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