The food supply chain is infamous for its complexity. Orders are received from a variety of sources, requiring employees to spend countless hours inputting them into outdated enterprise software, while compliance is often managed with spreadsheets.
For years, software companies have attempted—sometimes successfully, sometimes not—to update the processes that drive the worldwide distribution of perishable foods.
Burnt, a startup from Y Combinator, believes that AI agents—software capable of autonomously performing tasks usually handled by people—can finally achieve what traditional enterprise solutions have not in the massive U.S. food sector.
This company, which leverages AI to automate supply chain back-office operations, has secured $3.8 million in seed investment, led by Penny Jar Capital, the venture fund supported by NBA star Steph Curry, with additional backing from Scribble Ventures, Formation VC, and angel investor Dan Scheinman, among others.
Joseph Jacob, Burnt’s co-founder and CEO, was raised in an environment surrounded by food manufacturing. He shares that his great-grandfather pioneered shrimp exports from India to the U.S. in the 1930s. Since then, each generation of his family has been involved in various stages of the seafood supply chain, from farming and processing to exporting and importing.
Jacob spent his formative years in India and, after graduating, worked on the production floor of a shrimp processing plant in a rural region. This gave him firsthand insight into the complexities of the food and hospitality industry.
Upon returning to the U.S. and overseeing large-scale seafood imports, he quickly became aware of significant inefficiencies.
“I ended up purchasing hundreds of millions of pounds of seafood, but everything was managed using Excel and a decades-old ERP platform,” Jacob shared with TechCrunch. “In an industry where profit margins are extremely slim, effective supply chain management is essential for survival. We tried several software solutions, but two major implementations failed. That’s when I realized I wanted to create software for this field, not just work in it.”
Jacob’s story is far from unique. Enterprise software providers have long attempted to convince distributors to adopt large-scale systems that take years to implement, cost millions, and often alienate the small and mid-sized businesses that make up most of the market.
After twenty years of slow software adoption in this field, Jacob sees a significant opportunity in Burnt’s strategy: integrating AI agents with existing infrastructure rather than replacing it entirely.
“Everyone we speak with refers to their ERP as a necessary evil,” the CEO remarked. “Legacy software forced teams to abandon established routines and learn new ones. With AI, you can keep your existing processes and simply automate the work.”
Currently, food distributor sales teams receive orders through email, phone, WhatsApp, voicemails, text messages, and even fax. Each order must be manually entered, a time-consuming task that takes away from more valuable activities like acquiring new clients or increasing sales to current ones.
Burnt’s initial AI agent, Ozai, streamlines and automates the order entry workflow. Jacob asserts that it can manage up to 80% of processes that are currently bogged down by legacy technology.
Since its launch in January, Burnt has processed over $10 million in monthly orders for distributors of seafood, specialty items, and packaged foods. One of the largest food conglomerates in the U.K., with multi-billion-dollar revenues, is in the process of adopting Burnt’s platform. The company is already bringing in six-figure monthly revenue and is seeing consistent growth, though Jacob did not disclose specific figures.
Although developing AI for the food supply chain may not seem glamorous, Jacob insists that’s exactly the point. He believes that years of unsuccessful technology implementations have made industry professionals wary of outsiders lacking sector experience.
Both Jacob and his co-founders’ backgrounds have helped Burnt earn credibility in a relationship-driven industry. Chief Product Officer Rhea Karimpanal—Jacob’s childhood friend and now wife—comes from a family with a history in restaurant ownership, while CTO Chandru Shanmugasundaram has experience building software for restaurant operations.
Jacob previously worked at Rekki, a B2B marketplace for restaurants and suppliers backed by Benchmark, where he witnessed firsthand the limitations of supply chain technology and the potential for AI to revolutionize it.
However, attracting investors was not easy. While AI agents are a hot topic, persuading venture capitalists to invest in one focused on food distribution required a unique approach. According to Jacob, many investors were hesitant despite the market’s vast potential.
That’s where Penny Jar Capital, led by Curry, stepped in. The firm’s investment philosophy is to support entrepreneurs working in “overlooked” sectors where technology adoption has lagged.
“Two decades of missed opportunities for software adoption present a huge opening. Investors who recognize this understand the potential if executed well,” Jacob commented.
