Leadership: Ashok Seetharam and Ilya Preston
Headquarters: 313 N. Plankinton Ave., Suite 211, Milwaukee
What it Does: Smart shipping containers for high-value goods
Founded: November 2018
Next goal: Get the product to market and establish product-market fit.
Funding: Wrapping up $400,000 pre-seed round; plans for a seed round in the fall.
Ilya Preston and Ashok Seetharam met each other at the XLerate Health accelerator in Louisville, Kentucky in 2017, when each was working for a different startup.
Two years later, the pair has formed a new startup together, completed the gener8tor accelerator in Milwaukee, moved the company’s headquarters from Minnesota to Milwaukee and is completing a $400,000 seed round.
“We actually started out as a different company. … we were focused in serving the health care vertical,” Preston said. “A few members of the team essentially saw an opportunity that was in this vertical.”
That vertical is the shipment of high-end jewelry. Their startup, Paxafe, works with jewelers, logistics operators and insurance companies to carefully track packages containing valuable jewelry from door to door.
By drawing on their combined experience – Preston’s in supply chain, Seetharam’s in hardware – the co-founders were able to accelerate the growth of the software-hardware firm.
“Before starting Paxafe, I had (worked at) two startups of my own. I understand the difficulties, the challenges you have to face,” Seetharam said.
Current shipping methods for jewelry are often outdated, with aluminum safes often being shipped in standard cardboard boxes without traceability and beholden to time-consuming paperwork, Preston said.
PAXAFE’s smart packaging includes security and real-time tracking. The shipper locks the high-value item into its package, and an online portal linked to a barcode on the package includes the shipment information. The receiver can track the package location, and even whether it has been dropped, via the portal. The software and hardware are sold on a per-month or per-shipment basis.
This month, PAXAFE launched customer alpha testing for its prototypes, and plans to launch a paid pilot in May for the beta version of its packaging.
“For those paid beta pilots, we’re building a larger amount of beta units,” Preston said. “They’re not going to be production ready, but they’re going to be as close to the real thing as possible.”
Launching a startup that focuses not just on software, but also on hardware, has added some complexity and is more capital intensive, but the co-founders are confident it will be successful in its target market.
The data collected by PAXAFE can be used to help improve insurance companies’ underwriting, Preston said.
While Paxafe is currently focused on jewelry, it could eventually expand to include cash and other valuable items, Preston said.