Berlin-based AI startup reverse.fashion has secured a seven-figure pre-seed funding extension to advance its mission of automating textile sorting. The investment, led by High-Tech Gründerfonds (HTGF), will help the company scale its technology designed to enable a circular economy for fashion. Founded in 2024 as a spin-off from the Technical University of Berlin, the company aims to solve a critical industry challenge.
Addressing a Critical Industry Bottleneck
The fashion industry's transition to a circular model is hampered by inefficient sorting processes for used textiles. Manual sorting is labor-intensive, costly, and struggles to meet the scale required by new regulations like Extended Producer Responsibility. This bottleneck limits the potential for high-value resale and advanced recycling, leading to significant waste.
reverse.fashion confronts this issue with its intelligent, AI-powered sorting systems that digitize and classify garments. The technology analyzes items based on characteristics like condition, brand, material composition, and style. This automated process ensures textiles are accurately directed to their most valuable recovery channels, from resale to recycling.
The Impact of AI-Powered Sorting
The company's technology delivers substantial operational improvements for its customers in the textile sorting industry. According to co-founder Dr. Karsten Pufahl, the system can boost productivity by 40 percent while increasing revenue by approximately 20 percent. This data-driven approach replaces subjective manual labor with consistent, intelligent, and scalable automation.
By enhancing sorting quality and throughput, reverse.fashion's platform unlocks greater value from post-consumer textiles. This precision allows for better separation of items suitable for high-quality reuse or recycling, directly contributing to waste reduction. The solution helps the fashion industry meet both its sustainability goals and growing regulatory demands.
Strategic Expansion and Market Entry
The fresh capital is earmarked for accelerating the company's commercial expansion and market penetration. A key focus will be on scaling the successful pilot projects for its co.sort software product. This phase will intensify collaboration with existing partners and prepare for wider industry adoption.
Simultaneously, the investment will drive the market rollout of line.sort, the company's fully automated industrial sorting system. This comprehensive solution is designed to establish automated sorting processes at a large scale across the industry. The goal is to create the next generation of infrastructure for textile circularity.
Investor Confidence and Future Outlook
The investment from HTGF signals strong confidence in reverse.fashion's potential to transform the industry. Dr. Anne Umbach, Senior Investment Manager at HTGF, noted that the company addresses a central bottleneck and creates a foundation for greater efficiency. This backing validates the startup's approach to solving a pressing environmental and economic challenge.
Co-founder Mario Osterwalder expressed optimism, stating that the company is entering a new chapter with its market entry. The partnership with an experienced investor like HTGF provides crucial support for this next phase of growth. This collaboration is poised to accelerate the company's journey toward making textile circularity scalable.
reverse.fashion's seven-figure funding round marks a significant step toward overcoming a major obstacle in the circular fashion economy. By leveraging AI to automate and digitize textile sorting, the company is building critical infrastructure for a more sustainable future. This strategic investment from HTGF not only fuels its commercial expansion but also underscores the growing importance of technology in making circularity profitable and scalable.