Traceability technology is playing an increasingly important role in the industry’s efforts to manage and monitor their supply chains.
TrusTrace, an operating platform for fashion, food and retail brands looking to solve transparency challenges across their value chains, has benefited from the industry’s growing focus on the issue. The Stockholm-based software company announced Thursday $6 million in new funding.
Nordic venture capital firm Industrifonden and Fairpoint Capital led the Series A, along with BackingMinds and support from Fashion for Good. TrusTrace will use the new investment to accelerate global expansion, ramp up product development, and onboard new experts and engineers.
Founded in 2016, the company currently services more than 40 clients including fashion brands like Filippa K, Zalando, Decathlon, Fjällräven and Coop. Built on artificial intelligence (AI), blockchain and bots, TrusTrace helps brands track products and finished materials across suppliers, production facilities and raw materials providers. Brands use the platform to trace the journey of their goods across these touch points, ensuring that sustainability standards are met along the way.
The system was built to integrate with retailer, manufacturer and supplier systems, TrusTrace said, along with certification agencies and other sustainability solution providers. Currently, the platform counts 8,000 suppliers as users and can track 250,000 products worth more than $12 billion as they move through the value chain.
“We’re thrilled to announce this round of investment, with which we will accelerate our international expansion, and help even more fashion brands in the transformation towards more sustainable supply chains,” TrusTrace founder and CEO Shameek Ghosh told Sourcing Journal. “We believe that fundamental, structural change can only be achieved through industry-wide collaboration.”
“With this latest funding round, we will continue leveraging cutting-edge technology and the best minds in the industry to achieve positive, restorative change for people and the planet,” he added.
TrusTrace has already developed international partnerships with some of the sector’s leading brands and organizations, from French luxury firm LVMH to innovation incubator Fashion for Good. And as the industry’s appetite from sustainability solutions grows—driven by consumer interest, governmental regulations and investor demand—the market for tools ensuring environmental standards are met should expand accordingly, Ghosh said.
Beyond giving brands supply chain visibility, data gleaned from the platform can help manage inventory risk, ensure legal and social compliance and calculate a supply chain’s ecological impact.
“Supply chain traceability and transparency are critical for retailers to become sustainable,” Rebecka Löthman Rydå, investment manager at Industrifonden said, adding that the firm seeks to back “transformative ventures” with the potential to impact society. “With a mission to increase sustainability, TrusTrace can make a real and positive impact through their technology and we are therefore proud to support their journey.”
Hadar Cars, investment director for Fairpoint Capital, said the burgeoning demand for supply chain transparency attracted his company’s interest.
“Consumers, businesses and regulators alike are demanding solutions for sustainable practices, which have evolved from a ‘nice-to-have’ to a ‘must-have’ for leading companies,” he said, pointing to TrusTrace’s existing consumer traction and enterprise-scale solution as factors seen fueling its success.
US innovators band together
Meanwhile, stateside innovators are seeking to rapidly advance the development of sustainable global supply chains.
The U.S. Coalition on Sustainability (USCS), a nonprofit established in collaboration with the United Nations, announced an expansion of a digital platform dubbed SustainChain, which brings together investors and public and private businesses to accelerate progress toward the U.N.’s Sustainable Development Goals (SDGs). The platform, created in concert with global technology consultancy Thoughtworks, pulls expertise from more than 1,000 member groups to push the industry to meet these benchmarks by 2030.
A new machine learning engine aims to scale SustainChain’s solutions and more effectively connect members based on their shared SDGs. “The goal is to drive connection and collective action among community members working on similar projects and highlight opportunities to streamline and more rapidly scale up efforts,” they added. The move will help members identify their collective blind spots and develop solutions together, as well as push for funding and support as a group.
Organizations of all sizes—and across categories—have joined SustainChain, from fashion and consumer goods companies to infrastructure and alternative energy players. The community, which includes Closed Loop Partners, Danone, EON, Green America, The Heart Fund, Paper Water Bottle, Six Senses and The Stimson Center’s Alliance for a Climate Resilient Earth, has developed opportunities to accelerate solutions for plastic waste, circularity in the textile industry, regenerative agriculture and environmental and social governance.
“We believe in the power of combining systems thinking, technology and human ingenuity to address today’s social, economic and environmental challenges,” Jacqueline Corbelli, founder of the USCS and creator of SustainChain, said in a statement. Over the past year, Thoughtworks has helped the organization build a platform that “provides a seamlessly guided and intuitive experience to fuel fast, collective impact on sustainability,” she added.
Elise Zelechowski, global head of diversity, equity, inclusion, sustainability and social change at Thoughtworks, added that the firm was “excited and deeply encouraged by the number of organizations that have joined the community” in an effort to “drive sustainability through technology.”
The expansion of SustainChain also parallels the launch of CitizenChain, a new platform that gives everyday consumers the opportunity to voice their opinions about the ecological and social issues that matter most. Students, activists and concerned citizens can offer support to brands within the SustainChain community, and urge them—along with local officials—to take on specific goals and projects.