Exclusive: Sortera is turning America’s scrap aluminum problem into cash | TechCrunch

When it comes to recycling, few materials can match aluminum. It can be reused an infinite number of times, and it’s often cheaper to recycle than to produce new aluminum because it requires so much less energy. Yet only about a third of the aluminum used in the U.S. gets recycled.

The problem lies in sorting mixed aluminum scrap — a challenge that has long stumped the recycling industry.

Michael Siemer, CEO of Sortera, thinks his company has found the key, though. Sortera says it has developed a system that can separate aluminum grades with over 95% accuracy — a breakthrough that could unlock a massive untapped resource in the recycling industry.

Here’s how it works: The company uses an AI model that identifies different grades of aluminum based on data from lasers, X-ray fluorescence, and high-speed cameras. The system has to classify each chip — about the size of a large potato chip — in a fraction of a second. “Ten milliseconds is a long time,” Siemer says. Once the vision system identifies the grade, a series of nozzles blow precise puffs of air to flip the chip off the belt and into the correct bin.

That speed and accuracy matters because other recycling operations must melt the aluminum first before they can tell which type of alloy it is. And if alloys aren’t sorted properly, the mixed heap is worth far less because customers can’t be confident it will have the properties they need.

“People have been wanting to go after [this unsorted aluminum], and nobody’s been able to unlock it,” says Siemer.

Sortera’s sorting accuracy has further helped the company unlock something else many startups seek: profitability. “The margin is exponential above 90%, [while] 92% gets you a nice little margin, 95% gets you a big margin, [and] 98% is a really big margin.”

That’s helped the company become cash flow positive since August, he says, all based on the operation of a single plant in Indiana. To build a second plant in Tennessee, Sortera recently raised $20 million in equity and $25 million in debt in a round led by VXI Capital and accounts advised by T. Rowe Price, with participation from Overlay Capital and Yamaha Motor Ventures, the company exclusively told TechCrunch. Trinity Capital is providing additional equipment funding.

The new plant, which is being built near Nashville, will come online in April or May. “It’s a replica of our Indiana plant,” Siemer says. At the Indiana facility, he says, “we run full-tilt, 24-7, and we’re running millions of pounds a month.”

So where does all that aluminum come from? The scrap aluminum that Sortera receives tends to come from shredded automobiles. Each aluminum grade fractures differently when shredded, and those visual differences help the AI classify the metal. “The chemical differences manifest themselves in the shredding,” Siemer says. Different alloys produce distinctive tears and folds that give the system clues. “You gain these little insights so that in about a 10-millisecond time window, you go, ‘I’m pretty darn sure that’s 356 [grade aluminum],” Siemer says.

As Sortera expands, much of its aluminum will likely end up back on automotive assembly lines. Automotive manufacturers have been using increasing amounts of the metal to reduce vehicle weight and improve fuel efficiency. “Every auto OEM on the planet has been to Indiana at least twice,” Siemer says.

Sortera is currently working on ways to process other metals like copper and titanium, but for the near future, the company remains focused on aluminum. “We could instantly sort the 18 billion tons of aluminum made annually in the U.S. Every piece of that, every pound would be sold at a profit in the U.S.”