By 2027, every t-shirt sold in the European Union is supposed to carry a small digital file describing what it is made of, where it came from, and what should happen to it when its wearer is done with it. That file is called a Digital Product Passport, and a two-person company in Köln thinks it should be the connective tissue of an entire circular fashion economy, not just a compliance checkbox.
Sacred Valley Tech, founded by Paolo Coda and Luca Urlacher, is building DPP infrastructure paired with an AI assistant called Sally that recommends end-of-life options, repair, resale, recycling, for individual garments [Sacred Valley Tech]; [ignitiondus.de]. The company is at the pre-seed stage, sits inside the ignition accelerator in Düsseldorf, and was flagged by deutsche-startups.de in October 2025 as one of five new Cologne startups worth watching [deutsche-startups.de, Oct 2025].
The regulatory tailwind
The EU's Ecodesign for Sustainable Products Regulation makes DPPs mandatory for textiles, with the rollout phased through 2027. That is the kind of deadline-driven demand that turns a sustainability pitch into a line item on a brand's IT roadmap. Brands do not get to opt out, and most of them do not have the data plumbing to comply, traceability across tier 3 and 4 suppliers is genuinely hard.
Sacred Valley Tech is pitching itself as that plumbing, with a consumer layer bolted on top [Sacred Valley Tech]. The bet is that whoever owns the passport also owns the relationship with the garment after the point of sale: the resale routing, the repair referral, the recycling handoff. That is a more interesting business than compliance-as-a-service, and a harder one to win.
Why the consumer layer matters
Most DPP startups are selling to procurement and sustainability teams. Sacred Valley Tech is doing that, but it is also building Sally, a consumer-facing AI that scans a garment and tells the wearer what to do with it [ignitiondus.de]. Co-founder Paolo Coda Rivera comes from sustainable alpaca clothing and ethical sourcing, which is the kind of background that produces a founder who actually cares whether the recycling pathway exists, not just whether the QR code resolves [Teeming.ai].
The arithmetic on the consumer side is the part worth doing on the back of an envelope. Europeans buy roughly 26 kilograms of textiles per person per year and discard about 11 kilograms, of which the European Environment Agency estimates only about 22 percent is collected separately for reuse or recycling. Across the EU's 450 million people, that is on the order of 4 million tonnes of clothing a year going to landfill or incineration that a working DPP-plus-routing layer could in principle redirect. Even capturing one percent of that flow, sending it to the right resale, repair, or fiber-to-fiber recycler, is 40,000 tonnes annually. At a modest 50 euro per ton routing fee, that is a 2 million euro revenue line, and it scales with mandate enforcement.
The credible risks
The pre-seed stage means almost nothing is proven yet, and the DPP category is getting crowded fast. A short, honest read on what could go wrong:
- Incumbent compliance vendors. Established traceability platforms like TrustTrace and Retraced already sell into the same brand procurement teams and have multi-year head starts on supply-chain data ingestion.
- Brand inertia on the consumer layer. Fashion brands may treat DPPs as a checkbox and refuse to hand off the post-sale customer relationship to a third-party AI, killing the most interesting half of the product.
- Execution bandwidth. Two founders and an accelerator slot is a thin team to ship both a B2B compliance backend and a consumer scanning app before the 2027 deadline rush.
What to watch
The next twelve months are about logos and seed capital. A named brand pilot, ideally a mid-market European label using the platform for an actual product line, would convert the pitch from credible to fundable. So would a seed round large enough to hire engineers against the 2027 clock. The October 2025 Köln coverage and a follow-up February 2026 piece flagging Cologne startups near a breakthrough suggest the local ecosystem is paying attention [deutsche-startups.de, Feb 2026].
The company Sacred Valley Tech most needs to outrun is TrustTrace, the Stockholm-based traceability platform that already counts Bestseller and Filippa K among its customers and that will almost certainly extend into DPP issuance as the mandate lands. Sacred Valley's edge, if it has one, is the consumer-facing Sally layer that TrustTrace has shown no interest in building. Whether that edge is a real moat or a distraction is the question the next pilot will answer.
Sources
- [Sacred Valley Tech] Homepage and product pages | https://sacredvalleytech.com/
- [deutsche-startups.de, Oct 2025] 5 brandneue Kölner Startups, die uns aufgefallen sind | https://www.deutsche-startups.de/2025/10/23/5-brandneue-koelner-startups-die-uns-aufgefallen-sind/
- [deutsche-startups.de, Feb 2026] 5 Kölner Startups, die vor dem großen Durchbruch stehen | https://www.deutsche-startups.de/2026/02/19/5-koelner-startups-die-vor-dem-grossen-durchbruch-stehen/
- [ignitiondus.de] Start-ups, ignition accelerator Düsseldorf | https://www.ignitiondus.de/startups
- [Teeming.ai] Sacred Valley Tech profile | https://teeming.ai/c/sacred-valley-tech/c3f583b2-cd58-498f-b516-bda52d8665f1