Stronghold Technology aims to become Tesla of coffee roasters

South Korea-based Stronghold Technology Inc. is the first startup to have applied artificial intelligence technology to coffee roasting machines. The company aims to become the "Tesla of coffee roasters" – just as an autonomous vehicle is an AI machine running on interlinked sensors, algorithms and data communications, so are Stronghold's coffee bean roasters, according to the company's chief executive, Woo Jong-wook.

"Roasting is an AI technology that evolves with data," said Woo in an interview with The Korea Economic Daily on Apr. 6.

According to Woo, coffee flavors can vary in a thousand different ways depending on how the beans are roasted. In order to produce high-quality coffee beans, it is essential to roast green beans by delicate and precise handling of the convection, radiation and conduction processes, alongside other controllable variables such as gas output.

Stronghold Technology digitizes and saves this data to create an AI algorithm that optimizes the roasting process. For example, the company has sold around 2,000 roasters worldwide, including to the US, UK, Mexico, Australia, China and Rwanda. The daily data from these roasters are collected on the company's cloud system and used to update the AI algorithm.

Founded in 2010, the startup posted 7 billion won ($6.3 million) in revenue last year. Stronghold Technology aims to log 10 billion won in revenue with 10 percent operating profit this year.

So far, the firm has raised around 17 billion won ($15.2 million) from investors, including SoftBank Ventures, Korea Investment Partners, Intervest and Kolon Investment. The company is also in talks over a potential technical tie-up with Restaurant Brands International (RBI), the parent company of Starbucks and Burger King.

There are only a few competitors that possess a similar business model. For example, California-based coffee appliance firm Bellwether Coffee is developing its own technology, and Nestle and Panasonic are running tests to produce similar products.

Moving forward, Stronghold Technology is preparing to shift its revenue model from selling roasters to original development manufacturing (ODM). Generally, coffee shops receive shipments of mass-produced beans to brew coffee, but Stronghold Technology plans to roast beans that are tailored to individual coffee shops and send direct shipments. The company is building a plant in Gangwon province that will support around 100 roasting machines.