How Smartex, H&M & Amazon Are Using AI to Cut Fashion Waste
Gilberto Loureiro's teenage summers working in a Portuguese textile factory sparked an unlikely entrepreneurship journey.
During those long shifts watching for flaws in the fabric flying through the machines, he developed what he calls "hate and love" for clothing production.
A decade later, armed with a master's degree in physics and a head full of ideas, Loureiro co-founded a company called Smartex, a start-up which has garnered the attention, admiration and investment of the likes of Amazon and H&M.
At Smartex, Gilberto has drawn on his formative experiences as an adolescent to fulfil a simple purpose: the reduction of waste in the fashion industry.
In essence, Gilberto is aiming to eradicate the need for people to do the job he did all those years ago by automating the flaw-finding process in textile factories.
Smartex streamlines this gruelling process by using high-tech cameras, vision software and artificial intelligence, all of which combine to reduce the amount of textile waste in clothing supply chains.
"I really love the textile industry and problem solving, but I hate this … inspection working and inefficiencies and the waste. It's really one of the most difficult jobs in the world," Gilberto told CNBC in a recent interview.
Tackling fashion's massive waste problem
The fashion industry discards approximately one truckload of clothes every second through burning or burying, according to the Ellen MacArthur Foundation, a non-profit organisation that promotes circular economy solutions.
In short, the fashion industry is one of the most wasteful in the global economy.
Smartex claims its defect-spotting technology enables production of 0.37% more garments per kilogramme of finished fabric.
This seemingly small percentage represents significant savings when applied to industry giants like Inditex, which used 678,596 tonnes of raw materials in 2024.
The company says it has prevented one million kilogrammes of fabric waste over the past three years.
The investors backing Smartex’s technology
The fashion industry's resistance to digitalisation has created a substantial opportunity for tech solutions.
"If this is the largest industry that is still untouched by [the] internet and is one of the largest pollutants in the world, and nobody is working on this in terms of technology [then] there is a massive gap here," Gilberto says.
This potential attracted remarkable investors including iPod inventor Tony Fadell, who led a US$24.7m funding round with Lightspeed Venture Partners in 2022.
H&M Group also invested in 2022, whilst Amazon Web Services backed Smartex through its Compute for Climate Fellowship programme.
“Their vision of enabling industries around the world to produce with significantly less waste aligns perfectly with H&M Group’s own commitment of leading the change to a better fashion future,” H&M said in a statement when its partnership with Smartex was first announced.
Smartex has raised more than US$40m to date, laying the groundwork for a huge period of growth.
Amazon partnership accelerates development
In November 2024, AWS selected Smartex as one of the recipients of funding as a part of its Climate Fellowship programme, providing Gilberto and his team access to advanced computing services and expert guidance too.
Lisbeth Kaufman, Head of Climate Tech Business Development at AWS, believes that climate start-ups face unique challenges.
"Climate tech start-ups, they have so much R&D that they need to do, maybe even more than standard tech companies, they have to invent new science or new technology, as well as new business models," she explains.
This year’s programme will see 20 firms participate with US$4m total investment.
How to convince factory owners to invest in Smartex
These days, Gilberto spends a great deal of time visiting textile factories in Asia.
In Bangladesh and Vietnam – two of the world’s textile manufacturing powerhouses – owners of factories are demanding immediate proof of return on investment before they invest in Smartex’s technology.
"If in 30 seconds he's not convinced about the ROI, in less than one year, for example, you are out of the game,” Gilberto says.
“We need to prove to them that they will save in materials, in yarn or in electricity.”
Factory investments typically cost hundreds of thousands of dollars, with payback periods averaging nine to 18 months according to the Apparel Impact Institute.
The grand aim for Smartex is to become an "operating system" for fashion factories, enabling fashion brands to track garment origins, production stages and water usage in the manufacturing process.
"These are basic questions that are very difficult or impossible to answer by most fashion brands," Gilberto says.
Explore the latest edition of Sustainability Magazine and be part of the conversation at our global conference series, Sustainability LIVE.
Discover all our upcoming events and secure your tickets today.
Sustainability Magazine is a BizClik brand
