This 'return nerd' is riding the AI wave to fix fashion’s dirty secret: '10 investors call us each week'

When Oscar Rundqvist, founder of Swedish startup eComID, travelled to New York to meet investors and fashion brands, he got a piece of advice he couldn’t quite shake.

"Avoid the word sustainability. Say nature instead."

He laughs as he tells the story – but adds that it says a lot about where the conversation is heading.

"I was frustrated. That a word has become so loaded that you need to invent a new one. It shows how polarised the sustainability debate has become. That’s not at all how it feels in the Nordics," he says when we meet in Barcelona, on the sun-drenched rooftop terrace of Norrsken House.

As much CO2 as all of Scandinavia

Anyone in the Swedish fashion or e-commerce scene probably knows Rundqvist already. He jokingly calls himself the "return nerd" and is a regular guest on industry podcasts discussing returns and the future of shopping.

It was when working at Swedish fashion giant H&M Group, where he led the company’s digital customer experience, that he came face to face with the industry’s return problem. Not just the emissions involved, but the fact that returns had been accepted as an unavoidable cost of doing business.

"Global return handling accounts for as much CO2 as all of Scandinavia. At the same time, every return costs a company between €20-35," he says.

That’s what led to eComID, a startup helping brands cut returns. Clients include fashion companies &Other Stories, Tiger of Sweden, Peak Performance and H&M.

Rating system like Uber

Each customer gets a kind of ID card – an eComID – based on their body measurements and, over time, their shopping history.

"Then we know which size is most likely to fit you, which reduces the chance you’ll have to send something back," says Rundqvist.

Customers with low return rates are rewarded with lower fees, while heavy returners pay more. The idea is to eventually introduce a rating system, like Uber or Airbnb. The big difference from other return tools, Rundqvist says, is that eComID works preventatively, not reactively.

"We see ourselves a bit like Neko Health [the Spotify founder's health screening company] – but for returns. The goal is to prevent a return before it happens."

The goal is to prevent a return before it happens

Fewer returns, more sales

Two years in, eComID now has 14 employees and works with around 40 brands, charging a monthly SaaS fee. Rundqvist won’t share revenue figures, but says not a single client has left in two years. He believes the secret is that environmental impact and profitability go hand in hand.

"For example, we did an A/B test with [fashion brand] Asket, where our tool increased conversion by 7% because customers felt confident it was the right purchase," the founder explained. "They also saw a 3% drop in return rate and 11% fewer 'bracketing' purchases – when you buy several sizes or colours just to return most of them."

Still, doesn’t helping brands sell more clash with the sustainability mission?

"I don’t think you can separate the two – returns and sales are connected. The key is helping people make the right purchase and avoid unnecessary ones."

AI boom fuels investor interest

Over the past six months, Swedish AI startups like Lovable and Legora have raised hefty rounds at sky-high valuations, while AI knowledge tool Sana Labs was recently acquired by a US firm for around €1 billion.

That’s helped shine a global spotlight on Nordic tech – and impact startups, too, are feeling the effect.

"American investors are really eager to get into AI companies in the Nordics. Right now, we have ten investors a week reaching out," says Rundqvist. "It feels like many just want to get a foot in the door with cool Nordic tech companies in the right sectors."

That’s a lot of inbound interest – what’s the trick to catching international investors’ attention so fast?

"Partly because we work with big fashion brands and are visible in the industry. But also because our model combines profitability with sustainability – that’s become increasingly important. And we’ve been in a lot of podcasts, panels, and events."

PR has played a key role too. eComID made Fast Company’s list of the world’s most innovative companies (in the under-50 category) and has been featured in the Wall Street Journal and Vogue.

American investors are really eager to get into AI companies in the Nordics

Backed by H&M

Last year, the company raised €2.75m at a €12m post-money valuation, with H&M Ventures and CapitalT among the backers. The plan had been to hold off on new fundraising – but given the current investor buzz, Rundqvist admits he’s "taken a few meetings."

Back to that piece of advice from New York – to avoid the word "sustainability" and use "nature" instead.

"My sample size here isn’t exactly statistically significant. But 'nature' was perceived, by the people I spoke to, as neutral. It’s something everyone likes, regardless of political affiliation."

Even so – or perhaps because of it – Rundqvist believes the Nordics and Europe have every reason to be proud.

"Companies here are genuinely trying to transform the industry to make it more sustainable."