Fiddlehead Technology, which makes forecasting systems for the food and beverage industries, has closed a $1.8 million round of seed financing from Build Ventures and the New Brunswick Innovation Foundation.
Halifax-based Build Venture accounted for $1.5 million of the round.
Moncton-based Fiddlehead said it will use the money to increase its development and data analytics team, and to expand the sales efforts led by its co-founders David Baxter and Shawn Carver.
“Forecasting has often been more art than science,” said Baxter, the company president, in a statement. “But with our prescriptive analytics, we can go beyond simply measuring forecast accuracy to offer data-driven recommendations to improve performance. That leads directly to more accurate demand forecasts, allowing companies to lower inventory, improve service levels and boost margins.“
Carver and Baxter are two veterans of the New Brunswick tech community who teamed up in 2012 to launch a data analytics company. They eventually settled on the food and beverage industry, and partnered with McCain Foods Ltd. to help with the development of Fiddlehead’s flagship product, Forecast Guardian. Forecasting demand is essential to food producers to make sure they don’t waste product that doesn’t sell, and to ensure they’re not penalized by retailers for having insufficient stock.
Forecast Guardian works with a food producer’s existing budgeting and operations software, layering over it to analyze factors that the company may have previously overlooked. It analyzes data on such factors as weather patterns, economic conditions and holidays to more accurately predict the demand for specific types of food.
In an interview, Baxter said Fiddlehead and McCain are now “coming out of the co-creation initiative” that has validated that the product. Now they plan to work with other food producers to install the system and ensure they can use it to predict demand in their specific markets.
He added that he and Carver will personally be leading the sales effort initially because they understand the product and are the best people to work with new clients on optimizing performance.
“As co-founders, we need to understand and be close to our customers and we need to help them understand what they should focus on to create value,” he said. “Once we understand exactly what that sales process is, then we can look at expanding the sales staff.”
Fiddlehead is the tenth investment for Build Ventures, and Partner Rob Barbara said the firm was attracted to the company because of the strength of the founding team and the size of the market.
“It’s a massive market,” he said in an interview. “There are 4,600 food and beverage manufacturers in North America alone that would benefit significantly from Fiddlehead’s platform. “
He added: “But the No. 1 reason is the team. Shawn and David are not just really experienced and smart but followed a wonderful business approach and are a pleasure to work with.”