An estimated 20% to 30% of all inventory in the U.S. is surplus, with much of it ending up in landfills. A startup called Sotira wants to help address this problem: It leverages AI to help companies offload and monetize their surplus inventory. Sotira partners with brands to offload millions of pounds of surplus grocery, health and wellness, and cosmetics goods all over the United States.
To fuel its mission, the company has closed a $2 million pre-seed funding round. Sotira plans to use the new funding to expand its operations nationally, specifically the midwest and southeast.
The startup, which exhibited at TechCrunch Disrupt Battlefield 200 2024, was founded by CEO Amrita Bhasin and CTO Gary Kwong. The pair met at UC Berkeley and bonded over their shared interest in the ecommerce and logistics space. Bhasin and Kwong were both running their own companies that were focused on selling previously owned, new, or used products.
The duo then started running a liquidation business together because they wanted to understand how the space operated before jumping into starting a company. They decided to cast a wide net before zeroing in on their mission with Sotira.
“We learned that the market opportunity for monetizing overstock is huge,” Bhasin told TechCrunch. “It is a multi-billion-dollar market, and it is a very old-school manual space, like the people we’re talking to are doing things on pen and paper. They’ve never heard of ChatGPT, they don’t know what AI is. And so that pretty much was the catalyst for us starting the company. We were like, there is a market opportunity here.”
Sotira helps to offload products that are nearing their expiration date, items that are facing storage capacity issues, and products that have been over-ordered. Vetted suppliers can sign up for Sotira and link their storage capacity or inventory. Sotira then matches the products to a buyer that will then pick up pallets from the supplier’s warehouse.
Buyers are verified, brick-and-mortar stores all over the country. They can share the UPC codes of the kind of inventory they purchase, and Sotira will use AI to match them with inventory. Sotira automates compliance and facilitates transactions and logistics with buyers so suppliers get paid out upon pickups. Sotira’s goal is to clear surplus within a few days of receiving inventory data.
In the past, brands would have had to identify the stock they would not be able to sell to their primary purchasers, and then call up different liquidators to compare offers and manually negotiate prices. Sotira has brought this process online and allows suppliers to clear up inventory much faster.
Sotira charges a monthly fee for access; it also takes a percentage of revenue from each transaction on its platform.
While Sotira is beneficial for suppliers and buyers, Bahsin says Sotira is also proud of its ability to open up affordable access to premium products that people may otherwise be unable to access. For instance, Sotira works with a lot of CPG beverage brands that end up offloading their excess inventory to discount grocery stores.
“In the economy right now, where you currently look at how rapidly grocery prices are increasing, these are the categories consumers purchase the most,” Bahsin said. “There is so much value in opening affordable access to these items. A lot of the buyers we work with are in rural areas. They’re in areas that they may be more impoverished, where consumers actually rely on purchasing from over-stock stores, like they won’t purchase from a Whole Foods, they’re purchasing from a discount grocery store.”
Bahsin also noted that since California has passed legislation to stop grocery stores from dumping food and beverages, Sotira can now approach these companies and inform them that there’s a market for their surplus inventory.
Sotira plans to expand beyond food, beverage, health, and cosmetics in the future and move into the apparel space. The company is getting interest from brands that want help moving their excess clothing and shoes, Bhasin said.
Sotira’s pre-seed funding included participation from Unusual Ventures, Night Capital, K5 Global, Ritual Capital, and others.
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