Food supply chains are notoriously messy. Orders arrive through many different channels, and staff spend hours manually entering them into outdated enterprise software systems. Compliance often depends on scattered spreadsheets. For decades, software companies have tried to modernize the workflows behind the global movement of perishable goods, but with mixed success.
Now, a Y Combinator startup called Burnt believes AI agents can succeed where traditional enterprise software has not in the trillion-dollar U.S. food market. AI agents are software programs that can automatically handle tasks typically done by humans. The company, which automates back-office supply chain tasks with AI, has raised $3.8 million in seed funding. The round was led by PennyJar Capital, the venture firm backed by NBA star Steph Curry, with participation from Scribble Ventures, Formation VC, and angel investors including Dan Scheinman.
Burnt’s co-founder and CEO, Joseph Jacob, grew up around food factories. His great-grandfather was the first to export shrimp from India to the United States in the 1930s. Since then, each generation of his family has worked somewhere along the seafood supply chain, including in farming, processing, exporting, and importing. Jacob moved to India during his formative years and, after college, worked on the factory floor of a shrimp processor in a rural area. This experience introduced him to the intricacies of the food and restaurant business.
When he returned to the U.S. and began managing large volumes of seafood imports, he noticed major inefficiencies. He said, “I ended up buying hundreds of millions of pounds of seafood, but everything was tracked on Excel sheets and a 20-year-old ERP system. In a business with razor-thin margins, it is nearly impossible to succeed without good supply chain management. We went through multiple software implementations, but two rollouts failed. That is when I realized I wanted to build software for this industry, not just work in it.”
Jacob’s experience is not an isolated one. Enterprise software vendors have long tried to sell distributors on large rollouts that drag on for years, cost millions, and frustrate the small and mid-sized players that dominate the market. After two decades of missed software adoption in the industry, Jacob believes Burnt’s approach of layering AI agents on top of existing systems rather than replacing them represents a massive opportunity. He stated, “Everyone we talk to calls their ERP a necessary evil. Traditional software forced teams to rip out old processes and adopt new ones. With AI, you do not need to change the process; you just get the work done.”
The current process is often inefficient. Sales representatives at food distributors receive orders via email, phone calls, WhatsApp, voicemails, texts, and even faxes. Each order then has to be manually keyed into a system. While critical, this process consumes hours that could be spent on higher-value work like winning new customers or upselling existing ones.
Burnt’s first AI agent, named Ozai, automates and manages this order-entry process. Jacob claims it can handle up to eighty percent of workflows that are currently stuck in legacy systems. Since launching in January, the startup has processed more than ten million dollars in monthly orders across seafood, specialty goods, and packaged food distributors. One of the United Kingdom’s largest food conglomerates, with billions in revenue, is currently implementing Burnt’s system. The company is already generating six-figure revenue and growing steadily month-on-month, though Jacob declined to share exact numbers.
While building AI for food supply chains may sound unglamorous, Jacob says that is the point. He argues that decades of failed technology rollouts have left operators skeptical of outsiders with no industry experience. His background, and that of his co-founders, has helped Burnt gain trust in a sector where relationships matter. Chief Product Officer Rhea Karimpanal, Jacob’s childhood friend and now wife, comes from a family that ran restaurants. Chief Technology Officer Chandru Shanmugasundaram built software systems for restaurant applications. Jacob previously worked at Rekki, a Benchmark-backed B2B marketplace for restaurants and suppliers, where he saw firsthand how brittle supply chain technology could be and how AI might transform it.
Winning investors was not straightforward. While AI agents are a popular topic, convincing venture capitalists to back one for food distributors required a different pitch. Jacob said many lacked conviction in the market despite its large size. This is where Steph Curry’s PennyJar Capital came in. The firm’s thesis is centered on backing founders who are building in overlooked industries where technology adoption lags. Jacob concluded, “Two decades of missed software adoption is a massive opportunity. Investors who understand this know it can be huge if executed right.”