Food supply chains are notoriously messy. Orders arrive through different channels, staff spend hours manually entering them into clunky enterprise software systems, and compliance often depends on spreadsheets.
For decades, software vendors have tried, with mixed success, to modernize the workflows behind the global movement of perishable goods.
Now, a Y Combinator startup called Burnt thinks AI agents — software that can automatically handle tasks typically done by humans — can succeed where traditional enterprise software hasn’t in the trillion-dollar U.S. 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, the venture firm backed by NBA star Steph Curry, with participation from Scribble Ventures, Formation VC, and angel investors, including Dan Scheinman.
Burnt co-founder and CEO Joseph Jacob grew up around food factories. He says his great-grandfather was the first to export shrimp from India to the U.S. in the 1930s. Since then, each generation of his family has worked somewhere along the seafood supply chain, including 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. The 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.
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“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,” Jacob told TechCrunch. “In a business with razor-thin margins, it’s nearly impossible to succeed without good supply chain management. We went through multiple software implementations, but two rollouts failed. That’s when I realized I wanted to build software for this industry, not just work in it.”
Jacob’s experience isn’t an isolated one. Enterprise 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.
“Everyone we talk to calls their ERP a necessary evil,” said the chief executive. “Traditional software forced teams to rip out old processes and adopt new ones. With AI, you don’t need to change the process; you just get the work done.”
Here’s how things tend to work today: Sales reps at food distributors receive orders via email, phone calls, WhatsApp, voicemails, texts, and even faxes. Each order then has to be keyed in manually. While critical, the process eats up hours that could be spent on higher-value work like winning new customers or upselling existing ones.
Burnt’s first agent, Ozai, automates and manages this order-entry process. In fact, Jacob claims it can handle up to 80% of workflows that are currently stuck in legacy systems.
Since launching in January, the startup has processed more than $10 million in monthly orders across seafood, specialty goods, and packaged food distributors. One of the U.K.’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’s the point. He argues that decades of failed tech rollouts have left operators skeptical of “tech tourists” with no industry experience.
His background, as well as 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, while CTO 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 tech could be and how AI might transform it.
Still, winning investors wasn’t straightforward. AI agents may be hot, but convincing VCs to back one for food distributors required a different pitch. Many lacked conviction in the market despite its size, he said.
That’s where Curry’s Penny Jar Capital came in. The firm’s thesis is centered on backing founders who are building in “overlooked” industries where tech adoption lags.
“Two decades of missed software adoption is a massive opportunity. Investors who understand this know it can be huge if executed right,” Jacob said.