Sotira secures $2M pre-seed to help brands monetize surplus inventory

Sotira, an AI-powered surplus inventory management platform, has raised $2 million in pre-seed funding to help brands offload and capitalize on their surplus inventory.

The funding round included participation from Unusual Ventures, K5 Global, Night Capital and Soma Capital.

Amrita Bhasin, co-founder and CEO of Sotira, said the company was founded to enable brands to quickly sell their excess stock, with a specific focus on grocery, health and wellness and cosmetics items.

Bhasin said surplus procurement is a $550 billion industry that lacks automation and still largely operates off pen and paper.

“Reverse logistics is an industry that really lacks technology, and so that was pretty much the catalyst for starting the company,” Bhasin told FreightWaves in an interview. “We offload and monetize overstock and handle all the reverse logistics, all the compliance, all the paperwork. We automate processes like bill of ladings, invoices, credit checks, transactions. Again, this is an industry in which if you’re doing a liquidation purchase, you’re typically handing a physical check to the driver. It’s very old school and the status quo.”

Bhasin said reducing waste was another goal when they founded the company.

About $163 billion worth of inventory is discarded each year due to expiration or overproduction, according to a study by global manufacturer Avery Dennison.

Optoro, a firm specializing in sustainable returns and resales, estimates that returned inventory creates 5.8 billion pounds of landfill waste each year, and the shipping of returns emits 35 billion pounds (16 million metric tons) of carbon dioxide annually.

“We’ve had companies and buyers reach out from other countries, as far away as Australia, who were like this, these items are going to go in the landfill by this date. Is there anything you can do? And obviously we want to help,” Bhasin said.

Sotira was founded in 2022 by Bhasin and Chief Technology Officer Gary Kwong. The pair met at the University of California, Berkeley, where they bonded over shared interests in technology and business.

The company gets its name from Sotira, who was a female physician and mathematician in ancient Greece more than 2,000 years ago.

Sotira optimizes selling excess inventory through its AI-powered marketplace.

“Companies on board on our platform, the Sotira app, and then they can either sync their storage capacity model, or sync their warehouse management system,” Bhasin said. “A lot of the brands are just uploading their inventory data. Then we share it with our network of buyers on the platform. We have buyers all over the U.S. Our buyers make 1,000s of purchases, 1,000s of transactions a month, and our goal is that they’re running as many of those transactions as they can through our platform.”

Bhasin said the traditional model of selling surplus inventory could take weeks, but on Sotira they can sell it in two days.

“Everything in the timeline is a lot faster, because we’re using tech to automate all of these steps, like the payments, the compliance, all of that,” Bhasin said. “We share it with the buyers. Buyers make offers. Our algorithm automates the cost benefit analysis.”

Sotira’s algorithm can also help brands find the best deal for their surplus merchandise, Bhasin said. 

“It’s not always the highest offer that is the best for that customer. If a customer’s storage renews on the first of the month, and it’s the 28th and somebody will pick it up tomorrow for a lower rate than someone next week, you might want to go with the person who picks it up tomorrow for a lower rate,” Bhasin said.

Sotira’s customers range all over the U.S., with a strong presence in the Midwest and Northeast.

“I would say the Midwest is huge, just in general, in the logistics space,” Bhasin said. “We had a lot of stuff that comes from the Northeast to the Mid-Atlantic to the Midwest. Pennsylvania and New Jersey are huge hot spots. There’s just historically been a lot of liquidation out in that area, a lot of warehousing districts, for example, like Edison, New Jersey.”

Bhasin and Kwong will use the $2 million pre-seed funding to expand Sotira’s operations.

“We’re using it to build out our team. Currently, we’re a pretty small team. We’re hiring software developers, full stack developers, and then we’re hiring business development representatives to help with sales and partnerships,” Bhasin said. “It’s primarily to build out the platform, build out custom warehouse management systems integrations. Then build out more partnerships with more companies.”

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