Augment has acquired Merlin, a stealth AI company focused on wholesale distribution. The move gives the supply chain AI platform its first foothold in the more than $8 trillion U.S. wholesale distribution sector. It’s an industry that still relies heavily on legacy systems and spreadsheets.
The deal brings distribution industry veteran Alex Moazed to Augment as president of wholesale distribution, along with co-founders Nick Johnson and John Schumacher, former head of AI at Grainger.
One reason behind the acquisition? Customer demand. Freight brokers and carriers kept asking Augment CEO Harish Abbott whether the platform worked with distributors — their biggest customers.
“When we looked at what Alex had built, two things stood out immediately: distribution-specific domain expertise that would have taken us years to replicate, and a data philosophy we share completely — customer data stays isolated, period,” Abbott said. “It never trains models for anyone else.”
Moazed co-founded Merlin after running Applico Capital, the distribution industry’s first dedicated venture capital fund, where he evaluated over 700 supply chain technology companies. Applico participated in Augment’s seed round in January 2025.
“By the time acquisition conversations got serious, the cultural and technological fit was already obvious,” Moazed said.
The Case For A Purpose-Built Distribution AI
B2B distribution is extremely decentralized, even more so than freight. Enterprise distributors lose margin to operational complexity driven by fragmented systems. This fragmentation creates inconsistent product language and manual processes across multiple enterprise resource planning (ERP) systems.
“Sales reps spend 30 minutes entering a purchase order that a customer already typed out,” Moazed said. “Counter reps get halfway through a quote, the ERP crashes, they start over. Branch managers call suppliers every two weeks just to check on open orders.”
A single enterprise might run six different ERPs. A quote can take two minutes per line across thousands of lines daily. Generic AI tools fail to handle unit conversions, customer-specific SKU language and exception-heavy workflows. Many also train shared models on proprietary distributor data without returning value to customers.
“Distributor data is a competitive moat — their resistance to shared-data AI models isn’t an objection to overcome, it’s a legitimate business concern,” Moazed said.
Augment’s platform, Augie, uses agentic AI to follow standard operating procedures written in natural language rather than custom code.
“Previously, light business rules and workflow customization was put into the ERP with a small army of engineers writing custom code,” Moazed said. “Now, the incremental cost of customizing workflow automation is headed towards zero because you are writing a process document in English and the AI agents are actioning the work alongside your human teammates.”
Acquisition Augments Existing Customers
Augie’s distribution offering is already operational with more than $20 billion in combined distributor revenue under management.
Initial enterprise customers include Ewing Outdoor Supply, a $1 billion landscape distributor; Insco Distributing, a family-owned HVAC-R distributor; Brooks Safety Solutions, one of the nation’s largest fire and safety distributors; and Reece, a $3.5 billion leader in plumbing and waterworks distribution.
“Augie saves me 80% of the time spent on quoting,” said Mike Mackey, Commercial Services Manager at Ewing Outdoor Supply. “It’s as if I had my own personal assistant. It seamlessly integrates with workflows and automatically connects to my inbox and the ERP, with product search functionality that blows our ERP and website out of the water.”
Wholesale distributors operate some of the largest private fleets in the country. They are also among the biggest shippers of full truckload and less-than-truckload freight managed by the brokers and carriers Augment already serves.
“The more of the supply chain Augie manages, the better it understands every transaction on it — where freight is coming from, why it’s moving, and what happens on either end,” Abbott said. “We’re not building separate product infrastructure for separate industries. We’re building one AI platform. The more of the supply chain it touches, the more valuable it gets for everyone on it.”
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