Reducing Waste and Increasing Efficiency in a $1.8 Trillion Market

Gilberto Loureiro, the co-founder of Smartex, has seen firsthand the inefficiencies and waste that plague the fashion industry. As a teenager, he worked in a textile factory in Portugal, where he spent long days inspecting fabric for defects. This experience sparked a passion for problem-solving and innovation, which led him to develop Smartex’s AI-powered defect detection technology.

Smartex uses cameras, vision software, and artificial intelligence to identify flaws in textiles during production, reducing the amount of fabric that goes to waste. According to Loureiro, the technology has prevented over 1 million kilograms of fabric from being discarded in the past three years. This is a significant achievement, considering that the fashion industry generates about a truckload of waste every second, according to the Ellen MacArthur Foundation.

Fashion has a big waste problem, with about a truckload of clothes thrown away and buried or burned every second, according to the Ellen MacArthur Foundation, a nonprofit. Smartex claims that its defect-spotting technology means 0.37% more garments can be produced per kilogram of finished fabric — which adds up, if you consider that fashion giant Inditex (owner of Zara) used 678,596 tonnes of raw materials in its products in 2024, per its annual report.

The fashion industry is also one of the largest polluters in the world, with about 20% of water pollution globally caused by dyeing and finishing during textile production, according to the EU. This lack of technology in apparel production has made Smartex an attractive investment opportunity, with H&M Group and Tony Fadell, the inventor of the iPod and the Nest thermostat, investing in the company in 2022.

Smartex has raised over $40 million to date and has caught the attention of Amazon, which has invested in the company via its AWS Compute for Climate Fellowship. This initiative provides access to AWS experts and advanced computing services to companies working on climate-related projects. Smartex uses AWS technology to train its machine learning models to identify flaws in fabric, which can vary significantly.

Factory owners are keen to understand how quickly an investment in Smartex will pay back, with most spending a few hundred thousand dollars on the technology. The average payback period for an investment in Smartex is nine to 18 months, according to the Apparel Impact Institute. The goal of Smartex is to become an “operating system” for factories in the whole fashion supply chain, allowing brands to track information such as where garments are coming from, where they are in the production process, and how much water is used to produce items.

Fadell has likened the potential of Smartex to Apple’s software ecosystem, where the value lies not in individual products but in the ecosystem they create. Smartex aims to achieve a similar level of integration, making it an essential tool for fashion brands looking to reduce waste and increase efficiency in their supply chains.