Why the U.S. Air Force wants to do business with a Buffalo-based blockchain startup

The United States Air Force uses lots of manufacturing equipment to support the maintenance of its fleet.

It considers the data surrounding that machinery to be highly sensitive.

That’s the reason the Air Force recently awarded a $2 million contract to Buffalo-based VeriTX, a startup seeking to apply blockchain technology to the “digital supply chain,” VeriTX founder James Regenor says.

“We’re going to use blockchain to create data integrity and build a secure data layer over their existing systems,” Regenor says. “The problem right now is that it’s porous and they don’t trust that the data is secure.”

Those systems can be used as something as simplistic as parts procurement and ordering. It can also be used for defense contractors to send blueprints to the Air Force, which then uses 3-D printing or CNC machines to make the part on site.

The deal is a “demonstration project” with the Air Force that will scale into the rest of its operations if it’s successful, Regenor said.

Along with its deepening relationship with the U.S. military, Regenor said, the VeriTX system will also become marketable to the many U.S. subcontractors that do defense business.

“The contract is significant for us because of the opportunity on the other side of it,” he said.

Regenor, an Orchard Park resident and retired Air Force colonel, started VeriTX in 2019. While blockchain – a way of storing data across a dispersed server network – remains an opaque concept to the general public, Regenor believes it will be central in the next great wave of supply chain disruption. VeriTX has spent the pandemic building out its intellectual property portfolio and deepening its partnerships in industry and government.

The company raised $250,000 this year in friends and family funding as it prepares for a larger capital raise, and it is now looking to add three employees to its team to support the new business coming in.

“For us this is the spark that allows us to move beyond proof of concept,” Regenor said. “At the end of this contract, we’ll have a proven commercial product we’re pushing out.”

VeriTX is the 21st local startup to confirm a growth-oriented round of funding this year. The others include Jerry ($103 million), Squire ($60 million), Tackle.io ($35 million), Torch Labs ($25 million), Circuit Clinical ($7.5 million), SomaDetect ($6 million), Kickfurther ($5.9 million), HELIXintel ($1.6 million), Joblio ($4 million), Patient Pattern ($1.2 million), Ellicottville Greens ($1 million), Ognomy ($700,000), Immersed Games ($540,000), Braid Babes ($415,000), MemoryFox ($380,000), Zizo Technologies ($200,000), Thimble.io ($125,000), AirExpert ($100,000), Classavo (undisclosed) and HiOperator (undisclosed).