Smarter Sorting, which leverages AI to make physical product sustainability suggestions to organizations, raises $25M

With the acceleration of digital transformation, consumer product brands are considering — or actively adopting, as the case may be — product intelligence software. Product intelligence entails gathering, acting on, and analyzing data related to how customers use and perceive a company’s products.

Increasingly, these types of analyses are showing that customers care about the eco-friendliness of the products they’re buying. According to a March 2021 survey, GreenPrint, a company that develops corporate sustainability solutions, nearly two-thirds of Americans are willing to pay more for sustainable products. Organizations are responding — as of 2020, 88% of publicly traded companies had environmental, social, and governance (ESG) initiatives in place — but they’re facing challenges, including supply chain challenges exacerbated by the pandemic.

“The retail and consumer goods industries will see further sustainability regulations and pressure from consumers for sustainable products. Regulations and corporate commitments will increase to drive down the amount of packaging that ends up in landfill. And further up the supply chain, traceability is a consumer trend that is not going away,” Jacqueline Claudia, the CEO of Smarter Sorting, told VentureBeat via email. “Brands will have to increase the information shared on their labeling and progressive brands with better formulations or ingredients will use it for marketing purposes. Consumers will demand more data and information on the products they buy and they will want this information at their fingertips — online and in-store.”

Smarter Sorting aims to solve these challenges by suggesting to retailers and brands ways to better make, market, and move consumer products. The startup claims to have over 456 billion data points on millions of regulated consumer products, which it uses to map product data to regulatory and handling data — ostensibly helping organizations reduce their environmental impact.

Improving sustainability

Smarter Sorting was founded in 2015 by Claudia, Charlie Vallely, and Chris Ripley as a “waste repurposing” company. In recent years, it pivoted focus from the disposal of chemical waste to an ESG and environmental health and safety (EHS) “data partner” for retailers and consumer brands.

“Today, we are really strong on ingredients, chemicals, toxicity, and more in consumer packaged goods. We are building features, functionality, and machine learning algorithms to drive industry sustainability in packaging, electronics, and more — to add even more value for our retail partners and consumer brands’ ESG goals,” Claudia said. “Our big focus with all our roadmap work is using machine learning and AI to solve complex computations; that drives sustainability in the retail and consumer goods industries.”

Smarter Sorting’s platform leverages an automated classification engine that produces over 7,116 regulatory classifications for over two million consumer good products across 3,500 data point facets per product and 150 million chemical compounds. The machine learning models that power the engine train on data from large chemistry datasets, public retail datasets, safety data sheets, public text from city, and state and federal regulations, Claudia says, as well as first principle chemistry and physics simulations.

“For each product, we generate thousands of possible classifications and observations including the classifications needed for retailers to manage regulatory compliance (transportation, waste, safety, and more). And each day, we bring in over eight million new data points from our retail and supplier deployments,” Claudia added. “[T]he engine … generates up to 40,000 permutations per product and simulates the ranges of possible toxicity, corrosivity, flammability and regulatory outcomes. Every day, we search for publicly available data to enrich our product and chemistry data [and we use] back-of-the-store sensors [to process] millions of physically-returned products in retail stores.”

Data for good

According to Claudia, Smarter Sorting — which competes with UL’s WERCSmart — has added hundreds of brands over the past two years post-pivot. The startup now counts among its customers over 1,700 consumer good companies and 24 big box national retailers including Wegmans, Costco, and the Albertsons Companies, which include Safeway, Tom Thumb, and VONS.

“Our technology — and most importantly, our data — puts the information and insights they need about the sustainability and safety of consumer products they sell at their fingertips,” Claudia continued. “They need it for publicly-declared ESG goals and reports; they need it for internal reporting; they need it across the supply chain to remain compliant, avoid fines and reduce their environmental impact. Sustainability and good business sense are not mutually exclusive — the entire C-Suite will care about the impact that can be derived from our data. The data can have an impact across the entire supply chain from product formulation and design, to logistics, to purchasing and merchandising, to ESG, EHS, and customer resource management.”

Smarter Sorting today announced that it raised $25 million in a funding round led by G2 Venture Partners, bringing the 77-employee startup’s total capital raised to $60 million.