The food supply chain is notoriously messy. Orders arrive through various channels, staff manually enter into clumsy enterprise software systems, and compliance is often dependent on spreadsheets.
For decades, software vendors have been trying to modernize the workflows behind the global movement of perishable products.
Now, Y-combinator startups called Burnt Thinks Ai Agents software that can automatically handle tasks that humans normally do can be successful when traditional enterprise software is not in the US food market.
The company, which automates back-office supply chain tasks with AI, has raised $3.8 million in seed funding, led by Penny Jar Capital, a venture backed by NBA star Steph Curry.
Joseph Jacob, co-founder and CEO of Burnt, grew up mainly in a food factory. He says his great grandfather was the first to export shrimp from India to the US in the 1930s. Since then, each generation of his family has worked somewhere along the seafood supply chain, including agriculture, processing, exports and imports.
During his formative years, Jacob moved to India and after graduating from university he worked in the farm floor of shrimp processors in rural areas. This experience showed him the complexity of food and restaurant business.
When he returned to the US and began managing the imports of large quantities of seafood, he noticed a great inefficiency.
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“I ended up buying hundreds of millions of pounds of seafood, and everything was tracked on an Excel sheet and an ERP system for a 20-year-old,” Jacob told TechCrunch. “In a business with a thin margin of razors, it is nearly impossible to succeed without proper supply chain management. I have experienced multiple software implementations, but two rollouts have failed.
Jacob’s experience is not an isolated experience. Enterprise vendors have been trying to sell distributors on large rollouts for many years.
After missing out on 20 years of software adoption in the industry, Jacob sees Bert’s approach of stacking AI agents over existing systems as a major opportunity, rather than replacing them.
“Everyone we talk about calls ERP a necessary evil,” the CEO said. “Traditional software has forced you to rip older processes and adopt newer processes. With AI, you don’t need to change the process. You just have to complete the work.”
Today’s work is as follows: Food distributor sales representatives receive orders via email, phone, WhatsApp, voicemail, text, or even fax. After that, each order must be manually created. Importantly, this process eats time that can be spent on higher value jobs, such as attracting new customers and registering existing customers.
Burnt’s first agent, Ozai, automates and manages this order entry process. In fact, Jacob claims it can handle up to 80% of the workflows currently stuck in legacy systems.
Since launching in January, the startup has processed more than $10 million in orders per month across seafood, specialized products and packaged food distributors. One of the UK’s largest food conglomerates with billions of revenues is currently implementing Burnt’s system. The company has already generated six-figure revenue and is growing “steady” every month, but Jacob refuses to share accurate numbers.
Building AI for the food supply chain may sound unattractive, but Jacob says that’s the point. He claims that decades of failed high-tech crawlout left operators with no industry experience and skeptical of “high-tech tourists.”
His background and his co-founder background helped him gain Burnt’s trust in sectors where relationships are important. Jacob’s childhood friend and current wife – Chief Product Officer Rhea Kalipanar comes from a family running a restaurant, and CTO Chandru Shanmugasandaram has built a software system for restaurant applications.
Jacob previously worked at Lekki, a benchmark-backed B2B marketplace for restaurants and suppliers.
Still, it wasn’t easy for the winners. AI agents may be hot, but persuading them to back up the VC for the food distributors required a different pitch. Many, despite their size, lacked belief in the market.
That’s where Pennyger Capital, a curry, came out. The company’s papers focus on supporting founders that are building in “overlooked” industries that are behind in technology adoption.
“Unsuccessful adoption of software for 20 years is a huge opportunity, and investors who understand this know that if done correctly it can be huge,” Jacob said.
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