H&M Invests In German Textile-Sorting Startup Reverse Fashion

H&M has invested in Berlin-based startup Reverse Fashion as part of the company’s pre-seed funding round, strengthening the fashion retailer’s push into circularity-focused technologies. Reverse Fashion develops automated textile-sorting systems using artificial intelligence, RFID and advanced image recognition to identify and sort used garments for reuse and recycling.

“This support accelerates our roadmap to bring automated textile sorting for reuse to the market, improving the capture of high-value garments and enabling targeted material streams,” said co-founder Mario Osterwalder.

The funding round also included investment firm Kisora. The startup, founded in 2024 by Osterwalder, Karsten Pufahl and Paul Dörtenbach, plans to use the capital to advance its AI Sorting Partner platform and expand its research and operations teams.

“H&M sees strong potential for Reverse Fashion’s technology to unlock high-quality second-hand assortments and scale circular infrastructure,” said Laura Coppen, H&M’s Sustainable Fashion Investment Manager.