BELLEVUE, Wash. — Seven years after it came onto the Seattle area’s tech scene, a startup called Alitheon is making headway with a product identification system that can make sure a high-priced purse — or a high-performance airplane part — is the real deal rather than a counterfeit.
The system, known as FeaturePrint, doesn’t use barcodes or blockchain. Instead, Alitheon’s AI-enhanced software analyzes ever-so-slight irregularities in the surface of a manufactured item.
“We are able to see all of the features, flaws, aspects of the manufacturing process, however you want to define them,” Alitheon CEO Roei Ganzarski explained at Alitheon’s Bellevue headquarters. “Because they’re random and chaotic by nature, because they’re not there by design, they constitute a digital fingerprint.”
Sorting out what’s real and what’s fake is a challenge for supply chains, and finding solutions would be worth a lot of money. Experts estimate the market in counterfeit goods at more than $1 trillion per year and say that figure is steadily rising.
Ganzarski noted that the idea of tracking variations in manufacturing tolerances isn’t new. “What’s really new is the intellectual property that we’ve developed which allows us to do this with standard, off-the-shelf cameras,” he said. “So, no need for spectral imaging, no infrared, none of that nonsense. Just a standard camera. In fact, we can do it with a cellphone.” And he proceeded to demonstrate …
Time magazine put FeaturePrint on its list of the 200 best inventions of 2023, and Ganzarski said Alitheon’s “optical AI” system is finding applications in a wide variety of industries. The most recent deal was announced just last week: The Paris-based Ordre Group will leverage Alitheon’s FeaturePrint technology in a smartphone app called Authentique. The app can use smartphone photos to authenticate fashion and luxury goods throughout their full lifecycle — and provide protection against return and warranty fraud.
Alitheon also forged a partnership with Peer Ledger to authenticate precious metals as well as luxury and consumer goods through the company’s Mimosi Connect platform. Other commercial partners include SIMBA Chain (for supply-chain tracking), the London Bullion Market Association (for gold and precious metals) and FAST Sneaks (for custom-made sneakers).
But wait … there’s more: Alitheon offers ways to authenticate trading cards and other collectibles, to identify mislabeled food products and to flag counterfeit drugs. “Gilead finding fake HIV medicine, Novo Nordisk finding fake Ozempic syringes — the world of pharma and gray market is terrible,” Ganzarski said.
Authenticating components as they move through the automotive industry’s supply chain is also high on Alitheon’s agenda. “One of our investors is BMW, so they put us in the realm of ground transportation,” Ganzarski said. (BMW’s venture capital arm led a $10 million funding round in 2022; Ganzarski said Alitheon has raised “a little more than $30 million in total,” with BMW as the main investor.)
Now the company is getting into markets where the stakes are even higher: aerospace, military applications and the nuclear industry. Alitheon already has attracted $1.5 million in federal funding, including an $881,500 contract from the Pentagon’s Nuclear Weapons Center for setting up a supply-chain tracking system.
Late last year, Alitheon was among 15 winners in the U.S. Army’s xTechPrime competition, which focuses on pairing up small companies with technology integrators to address the Army’s modernization challenges. The win qualified Alitheon to submit a proposal for a small-business contract worth up to $1.9 million.
Aerospace is a market of particular interest — not only for Alitheon, but also for Ganzarski personally. He’s a former Boeing manager who came to Alitheon in 2022 after serving as a top executive at MagniX and Eviation Aircraft, two Seattle-area ventures that focus on electric aviation.
Ganzarski pointed to last year’s scandal over the sale of unapproved aircraft parts by AOG Technics — including engine parts that went into planes operated by American, United, Delta and Southwest. He said that case showed how parts authentication could address a significant safety issue for the aviation industry. “Imagine you’re installing a part, thinking it has one hour on it, when in fact it has 1,000 hours,” Ganzarski said. “What’s the risk you’re putting your passengers in every single flight?”
Improved authentication systems could also cut down on wasted military spending. “Last year, auditors found that Lockheed Martin had lost a million parts in the F-35 program,” Ganzarski said. “Lost? You don’t ‘lose’ parts. They just become unidentifiable. The barcode fell off, the sticker got erased. And you can’t use them because you can’t know for sure what they are — kind of like non-certified parts.”
Ganzarski said Alitheon recently ran tests with a defense aerospace contractor. “I can’t, unfortunately, name everything — but they’ve done tests with titanium aircraft parts. They did some drop testing, then they put them in a deburring machine, and then they took a grinder to them,” he said. “And what they told us is, they were able to deface 90% of the item and still identify it 100% of the time.”
Will the federal government mandate the use of Alitheon’s FeaturePrint technology?
“I don’t expect the FAA [Federal Aviation Administration] or any regulator in any industry to say, ‘Oh, you guys should use FeaturePrint.’ We’re a product. There’s no reason they should do that, just like they won’t say, ‘Use that piece of paper,’ or ‘Use that screwdriver.'” Ganzarski said. “What I do expect is that regulators — be it in aerospace, in pharma, whatever it is — will get to understand that it’s now 2024, and you can’t rely on paperwork or digital data anymore.”
So, where will Alitheon be in 2034? Ganzarski envisions a time when FeaturePrint will be widely used by consumers as well as manufacturers.
“Imagine my son has a bicycle, he has his Xbox and the watch that I gave him, right? Maybe they’re not expensive, but for him they’re important,” he said.
What if those items are stolen, and turn up later in someone else’s possession? “Imagine if you could pull out the phone in front of a cop, take a picture of the bike and say, ‘Yeah, that is the bike,'” Ganzarski said. “Imagine every pawn shop could just pull out their phone when someone tries to sell something, take a picture of the watch and say, ‘That’s the watch that Roei reported stolen two weeks ago.'”
Theoretically, the same principle could apply to identifying billions of dollars’ worth of stolen goods. “I won’t say that this will eliminate crime,” he said. “But for things like that, it reduces the incentive.”
