According to the American Chemistry Council’s 2021 Guide to the Business of Chemistry, as much as 96% of all manufactured goods are directly touched by the business of chemistry. Like every other major industry, the chemicals industry was affected by the COVID19 pandemic, forcing business executives to reconsider their companies’ strategic priorities.

One overarching outcome of the pandemic is the rethinking of assumptions about how people get work done in many legacy industries. Assumptions about what innovations to continue rejecting in favor of old and traditional ways of doing business, accomplishing objectives, and completing tasks are being discarded as the pandemic has forced the issue in companies attempting to increase their chances of successfully navigating the current uncertainty.

In The shifting landscape of chemicals and materials: The COVID-19 impact on the chemicals industry, published by Deloitte Insights on October 5, 2020, the authors state that, “While advanced digital technologies were already changing the business landscape, their applicability assumes even greater importance in today’s greater uncertainty. For example, digital technologies can help in rapidly reengineering products to reduce costs and improve the robustness of supply chains.”

They further describe three specific areas in which the accelerated adoption of digital technologies will occur in the chemicals industry:

First, they expect to see wider adoption of open platforms across manufacturing ecosystems;
Second, they expect to see greater efforts to gather and centralize information into searchable databases, and;
Third, they expect wider adoption and application of machine learning (ML) and artificial intelligence (AI) for developing new products, and for process innovations that increase efficiency.

To understand why this trend might strengthen and persist over time, we must first understand the problem.

The Problem: Decision Analytics in Legacy Industries is Difficult at Best, or Downright Impossible

In Commentary: Optimizing a truck fleet using artificial intelligence (FreightWaves, July 28, 2020), I observed that, “Some of the reasons commonly given for AI’s failure to proliferate within industrial settings are: it is difficult to integrate newer AI systems with existing, mature systems and processes; companies in mature industries lack sufficient expertise to implement such technologies or, if the expertise is available, it is too scarce and expensive; executives do not understand these technologies; there is a perception that the technology is too immature; there is insufficient data of the quality required to train AI systems; and in the past executives have been burned after buying into hype around AI.”

The theme of ML and AI applications being difficult to implement within industrial settings is the underlying theme that I discussed in Commentary: Understanding the data issues that slow adoption of industrial AI (FreightWaves, September 16, 2020). As Tim Cross put it in Reality Check, an article in the Economist’s Technology Quarterly for the second quarter of 2020 - Artificial Intelligence and its Limits; For most traditional businesses, it’s difficult to go from a working model to a useful system.

More specifically, the development of new chemicals, formulations, and materials is a time-consuming and expensive process that depends mostly on trial and error, or the use of overly complex or outdated modeling packages.

This is where Sunthetics comes in.

Sunthetics: Using Small Data & Decision Analytics to Accelerate Chemicals Industry Innovation

Sunthetics has built an easy-to-use ML tool that accelerates the discovery, development, and optimization of formulations, processes, and products in the chemicals industry. Sunthetics ML weds chemical engineering and predictive ML algorithms in order to help human experts quickly predict the formulations and process constraints that will most likely yield desired outcomes. Sunthetics ML can be used to: Detect anomalies; Perform diagnostics; Improve manufacturing processes, and; Enhance efficiencies.

Some unique features of Sunthetics ML are;

It requires no specific expertise in statistics, ML, or AI and the system helps users identify the next best experiments they should consider. The system is available wherever the users can access an internet connection.
It facilitates shorter experimental campaigns at low computational expense, thereby saving time, money, energy, and materials.
It uses attractive visualizations to aid the analysis and exploration of complex reaction processes and trends.
It uses small data, as few as 5 data points, to generate big insights.
The approach is reaction agnostic.
It helps users establish optimal operating conditions in about 20% of the time compared to human intuition and expertise.
The system is continuously improving since it learns from each additional experiment that users perform.

For these reasons, Sunthetics ML can unlock unprecedented performance. An article about the approach was published by the Proceedings of the National Academy of Sciences in August 2019.

This approach of using small data sets in AI and ML to solve industrial problems is gaining more proponents.

For example, in an article published by IEEE Spectrum on February 9, 2022, Andrew Ng, an AI pioneer noted for being: The cofounder of Google Brain; A former chief scientist at Baidu, and; Currently an Adjunct Professor at Stanford University, after previously serving as an Associate Professor and Director of the Stanford AI Lab, is interviewed about his shift in perspective about the best approach to ensuring that AI can be used beyond the internet giants. The author states, “He has also become something of an evangelist for what he calls the data-centric AI movement, which he says can yield “small data” solutions to big issues in AI, including model efficiency, accuracy, and bias.”

A Team With the Background to Solve Wicked Problems in Chemicals Industry Innovation

I first met Daniela Blanco, Cofounder & CEO of Sunthetics in 2018, when I served as 1 of 2 investor mentors for Sunthetics while they were preparing to compete in New York University’s Annual Entrepreneurs Challenge hosted by the Berkley Center for Entrepreneurship. Sunthetics won the $100,000 Technology Venture Prize, which goes to a team bringing IP developed at NYU to market.

Daniela holds a Ph.D. in chemical engineering from the Tandon School of Engineering at NYU, with a background that spans chemical engineering, advanced manufacturing, and machine learning. She is the inventor of Sunthetics ML. Miguel Modestino, an Assistant Professor of Chemical Engineering at NYU Tandon, is a Cofounder and Strategic Advisor to Sunthetics.

Sunthetics current team is rounded out by: Vivek Patil, Senior Chemical Engineer, who holds a Ph.D. in Chemical Engineering from Auburn University and is responsible for the experimental validation of Sunthetics’ algorithms; Yasser Khelalef, who holds an M.S. in Electrical Engineering from Ecole Nationale Polytechnique in Algeria and is the team’s Senior Software Developer; Ethan Tenison who holds a Master’s Degree and serves as the team's data scientist, and; Taylor Donegan, who is completing his MBA at NYU Stern and supports Sunthetics’ fundraising and operations.

Sunthetics’ other cofounders are Kyle Ireland, Myriam Sbeiti, Benjamin Rizkin, all NYU alumni, and Sophia Haussener.

Sunthetics is: The winner of a 2021 National Science Foundation Phase I Small Business Innovation Research Grant; A graduate of the 2020 cohort of The Heritage Group Accelerator Powered by Techstars; The winner of a 2019 Powerbridge NY Award, and; The winner of a 2019 Empire State Development Tech Transfer Grant.

In addition, Daniela has been named: A Top Innovator Under 35 LATAM by MIT Technology Review; Forbes 30 Under 30 in the North America Energy Category, A 2020 Top 100 Female Founder by Inc Magazine; The 2019 Brightest AI/CI Mind by Minds & Tech (MIT Center for Collective Intelligence), and; The 2020 Top Graduate Student Inventor by Lemelson-MIT.

Sunthetics was founded in 2018 with the goal of making the chemical industry more sustainable. At first, based on Daniela’s Ph.D. thesis, Sunthetics focused on the development of nylon intermediates using solar power.

Having raised non-dilutive capital that enabled the team to thoroughly study problems and opportunities in the chemical industry, Sunthetics pivoted in 2020 to offer a machine-learning platform that would enable chemical companies to fast-track the development of new materials, chemicals, and more sustainable processes. This pivot has enabled the team to target a larger market and significantly increase Sunthetics’ potential impact by serving multiple sectors of chemical manufacturing.

Sunthetics is raising additional capital to enable it to enhance the platform, win more customers, expand the team, and get to repeatable scale. If you are an early-stage fund or an angel investor who finds this opportunity compelling, you can reach out to Daniela directly, or let me know and I’d be happy to make an introduction.

Potential Customers Can Expect Superior Outcomes

Sunthetics early customers have experienced significant outcomes, ranging from 70% - 80% reductions in the number of experiments required in use-cases that included the prediction of properties for new materials, an electrooxidation process, and an electrochemical transformation process. Compared to one of the incumbent products on the market, Sunthetics ML yielded twice the efficiency and required 50% fewer experiments.

Bottom-Up and Top-Down Forces Are Working in Favor of #SupplyChainTech Startups

After writing How can machine learning be applied to improve supply chain? (Freight Waves, July 30, 2019) and Commentary: How can machine learning be applied to improve transportation? (FreightWaves, July 23, 2019), I reached the conclusion that; Innovations in AI and ML that make it possible for existing gaps in Data & Decision Analytics to be filled in legacy industries by adapting to those industries rather than requiring those industries to adapt to the chosen ML or AI approach have a greater likelihood of success.

Sunthetics accomplishes this.

Sunthetics will also benefit from the trends I discussed in my December 30, 2019 article that was published at FreightWaves, Commentary: What’s ahead for climate change and industrial supply chains. The trends I highlighted then have accelerated and gathered momentum a lot faster than I could have foreseen at the time I was writing the article. They include:

Citizen Action - The tendency for groups of citizens to bring governments, public agencies, and businesses to court for failing to fulfill their legal and constitutional obligations, such efforts are meeting with increasing success since I wrote the article;
Private Sector Efforts to Decarbonize Industrial Value Chains - In an effort to head off punishing legislation, some industries have formed working groups aimed at building a consensus about the best approaches for decarbonizing the value chains on which their businesses operate to meet the ESG, Sustainability, and Impact considerations and principles highlighted by the Climate Crisis and the UN Sustainable Development Goals;
Traditional Industries Increasing Adoption of Exponential Technologies - In the article I stated, “In 2020, we will start seeing such technologies applied much more rapidly to industrial processes and industrial supply chains than we have in the past. We have already touched on the factors that will lead to this. Additionally, in some industries, market forces will induce companies to act much sooner than they would have otherwise.” Since I made that statement, the COVID-19 pandemic, and increasing geo-political tensions between China and the West, as well as between Russia and the West has made this even more of an issue that corporate board members and executives must consider. Moreover, as the Cofounders and Organizers of The Worldwide Supply Chain Federation and The New York Supply Chain Meetup - we have seen this playing out in real time among the startups that are part of our grassroots-driven, open, collaborative community of the Builders & Buyers™ of early-stage supply chain innovation and technology. This is a trend I reported about in the early days of the pandemic, in April 2020. It is also a trend that is continuing to unfold among the startups in our portfolio.

At REFASHIOND Ventures, we believe that the top-down and bottom-up variables are working in harmony for the success of startups like Sunthetics. We believe in Daniela and the team that she’s pulling together to execute on her vision of how innovation in ML and Chemical Engineering can meaningfully improve outcomes in the global chemicals industry.

Our belief in Sunthetics’ approach is one outcome of the 6 months between July 7 and December 31, 2020 when I researched and wrote a weekly #AIinSupplyChain article for my former column at FreightWaves. It is also borne of my partner Lisa Morales-Hellebo’s ongoing work understanding the challenges faced by fashion and apparel industry value chain incumbents.

According to Statista, “In 2019, the chemical industry’s total worldwide revenue stood at some 3.94 trillion U.S. dollars. Chemical industry revenues reached a record high in 2014, at a total of 5.4 trillion U.S. dollars worldwide.” Furthermore, Statista’s U.S. Chemical industry - statistics & facts states that, “The chemical industry is one of the largest and most important industries worldwide. The United States is one of the largest national producers of chemical products globally. Including the pharmaceutical sector, its chemical shipments value was almost 720 billion U.S. dollars in 2020. The value added by U.S. chemistry in 2020 amounted to over 394 billion U.S. dollars.”

As the industry adjusts to accommodate the Sustainability, ESG, and Impact considerations that are being brought to the fore as the world grapples with the Climate Crisis, platforms like Sunthetics ML will become more essential. By adopting a freemium model, Sunthetics is making it possible for even the smallest organizations in the industry to adopt cutting-edge innovations that help them run their businesses more efficiently.

Heightening Geopolitical Tensions Increase Volatility, Uncertainty, Complexity, and Ambiguity

As I was writing this blog, Russia invaded Ukraine on February 24. That has created the very real prospect of a prolonged imposition of economic sanctions by the United States and its NATO Allies on Russia, and could be the beginning of an extended period of friction between Russia and the West.

That same day Techcrunch published The US must harness the power of Silicon Valley to spur military innovation, an OpEd by 3 founding faculty of Stanford University’s The Gordian Knot Center (GKC) for National Security Innovation. The authors state that, “The Department of Defense, other U.S. government agencies and a bipartisan consensus in Congress realize that China is strategically leveraging diplomacy, information and intelligence, its military might and economic strength, and all other instruments of its national power to redefine the future world order.”

Prior to this, in an OpEd published by Morning Consult on February 25, 2021, I made the argument that the Biden Administration Needs an Agency to Lead Technological Innovation in Global Supply Chains.

Why does this matter? Global trade abhors uncertainty. Supply chains do not handle chaos well, as we are learning. It is not yet clear what direct effect the events in Russia and Ukraine will have on global trade.

According to Statista, “Asia is the largest regional chemical market in the world by far. In 2020, Asia accounted for a 58.6 percent share of the global chemical industry's revenue. That was a significant increase from 2009, when Asia's share of the global chemical industry's revenue was less than 41 percent.” Within Asia, China is the largest exporter of chemicals to the United States.

If Russia’s invasion of Ukraine emboldens China into more aggressive behavior towards Taiwan AND towards its other neighbors in the South China Sea, global supply chains will experience even more volatility, uncertainty, complexity, and ambiguity (VUCA) than we have witnessed since 2020.

Companies, and industries generally, can adjust to such chaos by adopting innovations that enhance their ability to bounce back from supply chain and value chain disruptions due to forces that are beyond their control. To use terminology developed by Nassim Nicholas Taleb, a Retired Distinguished Professor of Finance and Risk Engineering at NYU Tandon, companies can adopt innovations like Sunthetics ML to help them build supply chains that are more antifragile.

Although, I mainly focused on the effects of the Climate Crisis and the increasing frequency of severe weather events that accompany it, supply chain disruptions caused by external forces beyond the control of any company or industry is a topic I explored in Commentary: Key supply chain innovation issues to consider in a world with VUCA (FreightWaves, June 11, 2019) and Commentary: Exogenous variables dominate a world with VUCA (FreightWaves, February 28, 2020).

Events in China, Russia, Iran, North Korea, and other places will continue to be destabilizing forces in global supply chains. For example: On February 15 the Chartered Institute of Procurement and Supply reported that the White House urged US chip manufacturers to diversify their sourcing and procurement of industrial gasses and rare earth metals away from Ukraine and Russia; On February 24, the Wall Street Journal reported that international companies with offices and operations in Russia and Ukraine are closing factories and offices, citing examples in agriculture, auto manufacturing, construction materials, energy, food processing, mining, oil & gas, petrochemicals, and software technology; On February 24, Bloomberg reported that the United States Department of Agriculture is warning fertilizer producers and suppliers against using Russia's invasion of Ukraine as an excuse for price gouging.

Companies and industries must embrace early-stage, but effective, supply chain innovations and technology to help them adapt to the unfolding realities of a more chaotic and unpredictable world characterized by: Military Conflicts; Trade Conflicts; Pandemics; Severe Weather Events; Demand Shocks; Supply Shocks; Labor Shortages & Unrest; Regulatory Shifts; Political Unrest, and; Adverse Social and Consumer Sentiment.

This is the new normal. This is the permanent context of the operating environment that makes investments in early-stage supply chain technology a strategic imperative for businesses large and small.

That sentiment is echoed by: Andrew Black, a supply chain expert and Principal at Efficio, in How Business Leaders Can Navigate Supply Chain Disruption In A High-Risk World (CEO Today, February 24, 2022), and; By General Stanley McChrystal, the retired four-star general who ran U.S. operations in Afghanistan, in Gen. Stanley McChrystal On Ukraine Risk: Get Your Business ‘In A Boxer Stance’ (Chief Executive, February 25, 2022).

As we say at REFASHIOND Ventures, we are #ObsessivelyEnthusiastic about what Daniela and the rest of the team at Sunthetics are building.

We are encouraged that downstream investors have awoken to the opportunity in #SupplyChainTech, with the Wall Street Journal’s Jennifer Smith reporting that Investors Are Piling Into Supply-Chain Technology, and Bessemer Venture Partners recently outlining and publishing their own #SupplyChainTech thesis in Roadmap: Supply Chain Software.

At REFASHIOND Ventures, we couldn’t be more excited to back supply chain technology founders at the early stages of their journey to transform the way the world makes, buys, moves, stores, and consumes the products and services that we all need.