In the United States, a staggering 20% to 30% of all inventory is considered surplus, much of which unfortunately ends up in landfills. A startup named Sotira aims to tackle this issue by utilizing AI technology to assist companies in offloading and monetizing their excess inventory. By partnering with various brands, Sotira manages to redirect millions of pounds of surplus products in sectors such as grocery, health and wellness, and cosmetics across the U.S.
To support its ambitious mission, the startup has successfully raised a pre-seed funding round of $2 million. The company intends to use this fresh capital to broaden its reach throughout the nation, particularly concentrating on the Midwest and Southeast regions.
Sotira, which showcased its offerings at TechCrunch Disrupt Battlefield 200 2024, was co-founded by CEO Amrita Bhasin and CTO Gary Kwong. The duo first connected at UC Berkeley, drawn together by their mutual interest in e-commerce and logistics. Both were previously managing their individual companies focused on the sale of used, refurbished, or new products.
They initially started a liquidation enterprise together to gain insights into how the industry functioned before launching their own venture. This exploration led them to identify a focused mission for Sotira.
“We discovered that the financial potential for monetizing overstock is immense,” Bhasin shared with TechCrunch. “It represents a multi-billion dollar opportunity, yet it’s still managed through outdated manual processes. Many of the individuals we interact with are resorting to pen and paper; they are often unaware of tools like ChatGPT or even basic AI concepts. This realization fueled our decision to create the company, recognizing the significant market potential.”
Sotira facilitates the offloading of goods that are approaching their expiration dates, products facing storage issues, or items that have been overstocked. Approved suppliers can register with Sotira to link their available storage or inventory. In return, Sotira identifies buyers ready to pick up pallets directly from the supplier’s location.
The buyers consist of verified brick-and-mortar retailers nationwide. They can share UPC codes relevant to their inventory needs, and Sotira employs AI to correspond these needs with available stock. The platform streamlines compliance, transaction management, and logistics, ensuring that suppliers receive payment upon pickup. Sotira aims to clear surplus inventory within days of receiving information from suppliers.
Historically, brands would need to sort through their unsold stock, reach out to multiple liquidators for quotes, and negotiate prices manually. Sotira modernizes and digitizes this entire process, enabling suppliers to expeditiously eliminate excess inventory.
Sotira charges a monthly subscription fee for access, in addition to a percentage of the revenue generated from each transaction processed on its platform.
While benefiting suppliers and buyers alike, Bhasin also emphasizes Sotira’s commitment to making premium products more accessible to consumers who may otherwise be priced out. For example, Sotira collaborates with numerous consumer packaged goods (CPG) beverage companies, assisting them in selling off surplus inventory to discount grocery outlets.
“Considering the current economic climate and the rapid rise in grocery prices, these are the segments where consumers are spending most,” Bhasin explained. “Opening up access to affordable options holds tremendous value, especially for buyers in rural and economically challenged areas, who often rely on discount grocery stores instead of premium retailers like Whole Foods.”
Bhasin also pointed out that with the recent California legislation mandating that grocery stores avoid discarding food and beverages, Sotira can now reach out to these businesses to highlight the market for their surplus items.
Looking ahead, Sotira aims to venture beyond the food, beverage, health, and beauty sectors into the apparel industry. Bhasin noted that they are receiving inquiries from brands eager for assistance in relocating surplus clothing and footwear.
Sotira’s pre-seed funding round saw contributions from investors including Unusual Ventures, Night Capital, K5 Global, Ritual Capital, among others.
Compiled by Techarena.au.
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