Sotira Raises $2M to Monetize Surplus Inventory | Supply Chain Solutions

Addressing Inventory Surplus with AI: Introducing Sotira

A significant portion – estimated between 20% and 30% – of all inventory within the United States is considered surplus, frequently resulting in disposal in landfills. Sotira, a newly established company, is dedicated to mitigating this issue by utilizing artificial intelligence to assist businesses in effectively offloading and generating revenue from their excess stock.

Securing Pre-Seed Funding for National Expansion

To further its objectives, Sotira has successfully completed a $2 million pre-seed funding round. These newly acquired funds will be strategically allocated to broaden the company’s operational reach across the nation, with a particular focus on the Midwest and southeastern regions of the U.S.

The Founders and Origins of Sotira

The company, which recently showcased its innovation at TechCrunch Disrupt Battlefield 200 2024, was founded by Amrita Bhasin, serving as CEO, and Gary Kwong, the CTO. The pair initially connected while students at UC Berkeley, sharing a common enthusiasm for the intersection of e-commerce and logistics.

Prior to Sotira, both Bhasin and Kwong independently operated their own ventures centered around the sale of pre-owned, new, or used merchandise.

From Liquidation to AI-Powered Solutions

Before committing to Sotira’s core mission, the founders engaged in operating a liquidation business. This experience was crucial in gaining a comprehensive understanding of the industry’s dynamics.

“We quickly realized the substantial market potential for monetizing overstock,” Bhasin explained to TechCrunch. “This represents a multibillion-dollar market, yet it remains largely reliant on outdated, manual processes – many businesses still operate using paper-based systems. They often lack familiarity with technologies like ChatGPT and AI.”

How Sotira Facilitates Surplus Inventory Management

Sotira specializes in assisting with the offloading of products approaching their expiration dates, items creating storage constraints, and goods that have been over-ordered. Suppliers, after undergoing a vetting process, can register with Sotira and provide details regarding their storage capacity or existing inventory.

The platform then intelligently matches these products with suitable buyers who will arrange for pallet pickup directly from the supplier’s warehouse.

Verified Buyers and Automated Transactions

Buyers consist of verified, physical retail stores located throughout the country. They can submit UPC codes indicating their desired inventory, and Sotira’s AI algorithms will identify matching products.

Sotira streamlines compliance, manages transactions, and coordinates logistics, ensuring prompt payment to suppliers upon product pickup. The company aims to clear surplus inventory within days of receiving the initial inventory data.

Transforming a Manual Process with Technology

Traditionally, brands faced the challenge of identifying unsellable stock and then contacting multiple liquidators to compare offers and negotiate prices manually. Sotira has digitized this process, enabling suppliers to clear inventory much more efficiently.

Sotira’s Revenue Model

The company operates on a subscription basis, charging a monthly fee for platform access. Additionally, Sotira receives a percentage of the revenue generated from each transaction facilitated through its platform.

Expanding Access to Affordable Goods

Beyond benefiting suppliers and buyers, Bhasin emphasizes Sotira’s commitment to increasing access to affordable, high-quality products that might otherwise be unavailable to certain consumers.

For example, Sotira collaborates with numerous CPG beverage companies to redirect excess inventory to discount grocery stores.

Addressing Economic Needs and Grocery Price Increases

“Given the current economic climate and the rapid increase in grocery prices, these are essential categories for consumers,” Bhasin stated. “Providing affordable access to these items is incredibly valuable. Many of our buyers operate in rural or economically disadvantaged areas, where consumers often rely on overstock stores rather than higher-end retailers.”

Leveraging New Legislation for Positive Impact

Bhasin also highlighted that recent legislation in California prohibiting grocery stores from discarding food and beverages presents a new opportunity for Sotira to engage with these companies and demonstrate the market value of their surplus inventory.

Future Expansion into Apparel

Sotira intends to broaden its scope beyond food, beverage, health, and cosmetics, with plans to enter the apparel market. The company is already receiving inquiries from brands seeking assistance with managing their excess clothing and footwear.

Investors Backing Sotira’s Vision

The pre-seed funding round for Sotira included investments from Unusual Ventures, Night Capital, K5 Global, Ritual Capital, and other prominent investors.