Burnt, a tech startup aiming to modernize what it calls an antiquated and fragmented food supply chain, has raised $3.8 million in seed funding to scale its agentic operating system for distributors.
The round comes at a time when raising capital is no small feat, particularly in the food-tech sector, where countless startups have struggled to gain traction.
The round was led by Penny Jar Capital, with participation from Scribble Ventures, Formation VC and a group of angels that includes longtime Cisco executive and startup investor Dan Scheinman.
The company was co-founded by three third-generation supply chain entrepreneurs
The company was co-founded by three third-generation supply chain entrepreneurs: Joseph “JJ” Jacob, Rhea Karimpanal and Chandru Shanmugasundaram.
Jacob described Burnt as an “agentic operating system” for the food supply chain – a layer of AI that works alongside, rather than replacing, a distributor’s existing ERP. He noted that ERPs function as the backbone of supply chain businesses but are widely regarded as outdated and cumbersome.
Instead of forcing companies through costly system overhauls to replace their operating systems, Burnt acts as an “AI watchtower” that sits on top of current systems, taking on the 80% of repetitive, time-consuming tasks so employees can focus on higher-value work, Jacob explained.
“We want to build a world-class team of people who are innately curious about what the real-world effects of AI are and how that affects blue-collar workers in America.”
Joseph Jacob, CEO & co-founder, Burnt
Automating the tedious in seconds
Burnt’s flagship AI agent, Ozai, integrates directly into sales and customer service workflows. Distributors often process thousands of daily orders through phone calls, emails, WhatsApp, texts and even fax – all in unstructured formats using shorthand communication styles.
“Our AI agent basically does that same job that takes 10 minutes in six seconds,” Jacob explained. “It takes away from the redundant side of what sales and customer service people do, and allows them to actually do sales and customer service.”
The technology’s adaptation to the shorthand communications unique to different sectors also gives Burnt another benefit, Jacobs explained. A seafood distributor, for instance, may order whole bluefin tuna broken down in dozens of specific ways. Chefs use their own shorthand to place orders. Burnt’s AI learns those nuances and improves with each customer it serves.
Jacob noted that over time, this allows Burnt to deploy smarter, more accurate systems across new distributors, aggregating subtle intelligence tailored to the food industry.
No retraining, instant ROI
Jacob emphasized that Burnt’s system doesn’t require retraining employees or disrupting existing operations.
“What if we build our system in a way where nobody has to change the way they work? They just have to do less of the work that they don’t like,” he said. “Within 30 seconds, you know exactly how the system works, and [employees are] essentially just reviewing the work of the AI instead of actually doing any work.”
Unlike legacy software rollouts that can take nine to 18 months, Burnt’s customers see ROI in weeks.
“Right now we’re at 97% of orders going into these companies’ ERP systems without any human in the loop. For me, I want to get that to 1% where they’re doing as little work as possible,” Jacob added.
Winning over investors in a tough climate: ‘Build with empathy’
Raising capital in today’s environment required more than pitch decks. Jacob and his co-founders’ industry roots helped win investors’ trust.
“My family’s been in seafood supply chain for 85 years. My great-grandfather was the first person to export shrimp from India to the US. I started my career peeling … shrimp on a factory floor,” he said. “In these kinds of unsexy industries or legacy spaces, it really has to be that you build with empathy. And the only way to build with empathy in these spaces is by actually having been in it.”
Jacob’s experience resonated with both customers and investors. One prospective backer, Jacob recalled, scheduled a 15-minute call with a Burnt client. The conversation ran for 90 minutes as the customer detailed how deeply Burnt had already integrated into their business. That candid endorsement became a powerful validator for the investor considering Burnt’s potential, Jacobs noted.
“JJ brings unmatched expertise to the food industry. He has lived every layer of it — from the factory floor to managing hundreds of millions in procurement – and that kind of knowledge can’t be picked up quickly by others,” said Bryant Barr, founding partner at Penny Jar Capital.
Scheinman agreed: “What impresses me most about the Burnt team is they are not just outsiders looking to disrupt a historic industry with radical technology. Instead, they’ve lived this life and know all the nuances in workflows and where the real opportunity is to help.”
Formation VC’s Solly Garber added that food distribution “effectively skipped the SaaS generation,” leaving the door open for Burnt to become “the central nervous system of the food distribution.”
Scribble Ventures’ Elizabeth Weil described the company’s work as “an AI solution that gives time back to the people who keep the food industry moving.”
For Jacob, empathy is the through line to building a long-lasting product and business relationships.
“The only thing that matters is happy customers,” he said. “Build with empathy. Because I’ve seen startups in this space that just look at the food industry as a big market. I think that’s a big red flag. Building with empathy and treating the customers with empathy is where they will actually start to give you real feedback.”
For Jacob, founder-market fit is as important as product-market fit.
“The first litmus test that the potential customers give us is ‘What do you even know about my industry? Have you ever walked a day in my shoes?’ A lot of the times venture dollars go to your Ivy League grads and all these kinds of things. But I love that we’re in this space where that earned experience of me peeling shrimp and dealing with ERP rollouts … it’s an advantage for us, and our customers see that as a sign of respect towards the work that they do," he explained.
Wanted: a ‘world-class team’
With fresh funding in hand, Burnt plans to deepen its product base and expand its team.
“We want to build a world-class team of people who are innately curious about what the real-world effects of AI are and how that affects blue-collar workers in America,” he said. “If I’m giving someone value today … our next product launch has to be 10 times the value.”
