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.
