Iceland's Sowilo Raises Pre-Seed to Bring AI Fashion Product Intelligence to Global Retailers

Reykjavik-based Sowilo has closed a pre-seed round backed by Iceland's Kría fund, TGC Capital, and angel investors to expand Catecut — its AI platform that auto-generates product titles, descriptions, and metadata from fashion images. The startup is now live on the Shopify App Store and already serving jewellery and apparel retailers in the US.

Iceland isn't typically the first place you'd look for fashion-tech innovation, but Sowilo is making a case for Reykjavik as a viable AI startup hub. The company has closed a pre-seed funding round — amount undisclosed — to scale its fashion product intelligence platform Catecut and accelerate the global rollout of its Shopify app.

Who's Backing It

The round draws from a geographically diverse set of investors:

Kría fund (Iceland)
TGC Capital (Netherlands and India)
Angel investors from Iceland and Australia

The cross-border investor mix reflects Sowilo's intent to target fashion retailers across multiple markets from the outset, rather than starting regional.

What Catecut Actually Does

Founded by Heiðrún Ósk Sigfúsdóttir, Sowilo built Catecut to solve a painfully manual problem in e-commerce: populating product pages at scale. The platform uses AI to analyze retailer product images and identify design attributes — cut, material, color, style — then automatically generates:

Product titles and descriptions
Metadata and tags
Image alt text
Multilingual, brand-specific content

The pitch is that what might take a merchandising team hours per SKU can be compressed into seconds, with output optimized not just for traditional search but also for generative AI discovery — the emerging channel where tools like ChatGPT or Perplexity surface shopping recommendations.

Catecut is described as platform-agnostic, though the current commercial push is centered on its newly launched Shopify App Store listing, making it immediately accessible to the long tail of independent fashion retailers globally.

Traction So Far

The platform is already live with jewellery and apparel retailers in the United States and has completed pilots with international enterprise retailers — a signal that the product works at both ends of the market. That dual positioning (SMB via Shopify, enterprise via direct pilots) is a smart hedge, giving Sowilo revenue diversity without fully committing to one go-to-market motion.

"We are happy to have expert investors support the next phase of our growth as we bring Catecut to new channels and markets, and expand our reach to both emerging fashion retail brands and enterprises internationally," said Heiðrún Ósk Sigfúsdóttir, founder and CEO of Sowilo.

Why This Matters for Retailers and Founders

For fashion e-commerce operators, the implications are direct: AI-generated product content is fast becoming table stakes, not a differentiator. Tools like Catecut reduce the cost of catalog management significantly, particularly for retailers with large or frequently rotating SKU counts.

For startup founders watching the AI tooling space, Sowilo's approach is instructive. Rather than building a general-purpose content AI, it went narrow — fashion attributes from images — and built domain-specific training that generic LLMs can't easily replicate out of the box.

The Competitive Landscape

Sowilo isn't alone in this space. Larger e-commerce platforms like Shopify itself and competitors such as Syte and Lily AI have invested in visual AI and product attribution tools for fashion. What Sowilo is betting on is that a focused, image-to-content pipeline — especially one optimized for the emerging generative AI discovery layer — is a defensible wedge. The Shopify app distribution channel gives it immediate access to millions of merchants without requiring a direct sales team to reach them.

The funding will go toward continued platform development, international customer acquisition, and Shopify app growth.