SuperCircle Secures $24M to Expand AI-Driven Waste Solutions

SuperCircle's Expansion and Impact in the Circular Economy

SuperCircle, a startup focused on circularity infrastructure, has successfully raised $24 million in Series A funding. This significant investment aims to support the company’s growth in key areas such as supply-chain data capture, AI-driven sorting, textile recovery, and processing. The funding round was led by Foundry venture capital, with additional support from BBG Ventures, Renewal Funds, and Elemental Impact.

The company was co-founded by Stuart Ahlem and Chloe Songer, who were also involved in the creation of Thousand Fell, a recyclable sneaker brand. Alongside them is Phong Nguyen, co-founder of Gilt Groupe. Their combined expertise has positioned SuperCircle as a leader in sustainable supply chain solutions.

A substantial portion of the new capital will be allocated towards enhancing machine-learning and product-identification models. Additionally, the funds will support the expansion of the technical team and deeper integration of sorting technology within retailers' supply chains.

Building an AI Model for Better Sorting

SuperCircle started developing its AI model in 2022. According to Songer, CEO of SuperCircle, the model focuses on identifying products and understanding end channels for those products—starting with recycling and later expanding to donation and resale. This approach allows the company to learn about different product types and categories, improving their ability to sort items effectively.

Currently, SuperCircle collaborates with over 75 brands, including notable names like Reformation, J.Crew, and Vans, as well as major retailers in the U.S. and Canada. The company processes more than 650,000 units per week at its Las Vegas facility, which spans 80,000 square feet.

Expanding Operations and Future Goals

Part of the funding will go toward establishing a comparable East Coast site by 2026, along with two smaller satellite facilities. With its current growth trajectory, SuperCircle expects to surpass 6 million processed units in 2025 and reach 1 billion units diverted from landfills by the end of 2030.

Songer emphasized that expanding operational footprint is essential to handling increased volume. She highlighted that retailers face significant financial pressure due to unsold goods, returns, and damaged inventory. In the U.S., brands hold an estimated $165 billion in excess and unsold inventory annually, with storage and disposal costs ranging from $4.50 to $16 per unit.

Addressing Waste and Financial Pressure

"The waste generated through the course of doing business is a cost center already," Songer said. "How many times you're touching an item in your supply chain, how long that item is sitting in your warehouse—all of that adds up."

Retailers are increasingly seeking solutions that not only reduce environmental impact but also recapture monetary value. SuperCircle positions itself as a necessary tool for businesses looking to improve their bottom line while addressing sustainability concerns.

Collecting Inventory at the Source

SuperCircle works with over 2,200 stores, collecting damaged, returned, and excess inventory directly at the source. The ability to capture and identify items at multiple points in a retailer's supply chain has been crucial in scaling operations and reducing costs.

"What makes sorting possible is volume," Songer explained. "Back in 2023, we were recycling a couple thousand units a month. Now we're moving 650,000 units a week."

Compliance and Strategic Partnerships

SuperCircle has also positioned itself as a potential partner for brands to comply with upcoming extended producer responsibility (EPR) legislation. The company played a key role in shaping California's SB 707, the first statewide textile EPR bill.

"My goal—and the only way I think this works and isn't looked at as a tax that raises consumer prices—is if that fee is linked back to something that is business-positive for brands," Songer said.

Diversifying Recovery Channels

Recovered items are routed into three main channels: resale, donation, and recycling. Resale is executed through partner platforms chosen by brands, while SuperCircle does not liquidate inventory on its own.

"We are not a reseller," Songer said. "If the brand has turned that on as a channel, we're sending to a brand-approved channel."

Donation has become a strategic part of the business, focusing on matching inventory to real-time needs. SuperCircle works with U.S. non-profits to ensure that specific items are distributed where they are most needed.

Recycling remains the largest end market, with SuperCircle focusing on applications such as housing insulation, automotive insulation, and carpet matting. The company also works closely with footwear recyclers and has achieved 25% to 30% textile-to-textile recycling over the past 18 months across materials like rubber, cotton, and polyester.

Challenges and Future Outlook

Despite rapid growth, SuperCircle faces challenges such as adoption and capacity constraints. Many retailers are only testing the service in narrow parts of their supply chain, and downstream textile-to-textile recycling markets remain early-stage.

Songer noted that the funding round closed during a tough venture market, with investors favoring AI deals. However, SuperCircle's unique mix of platform, AI, and physical infrastructure resonated with investors due to its measurable cost savings.

"Even in a down market, we're generating positive P&L outcomes for our partners," she said.