Canals raises $35M Series A to automate the industrial supply chain
What's the deal? Canals, a Miami-based startup building AI tools for wholesale distribution, has raised $35M in funding led by Base10 PartnersDealroom has a profile for this one. Try Dealroom →. The company will use the capital to accelerate product development aimed at automating the thousands of daily transactions between distributors, their customers, and their suppliers.
Canals has already processed over 8 million sales orders and $5B in payables for more than 100 distributors, including DSGDealroom has a profile for this one. Try Dealroom →, The Kendall GroupDealroom has a profile for this one. Try Dealroom →, and Locke Supply. Notably, it reached this scale without prior venture capital.
Why now? The $8.2T wholesale distribution industry still runs on messy inputs, imperfect data, and manual processes — precisely the kind of workflows where AI can now make a meaningful difference. Canals says its customers are seeing results like doubled quote conversion rates and 96% touchless invoice processing, fuelling demand to automate more operations.
"Our customers operate in the real world, with messy inputs, imperfect data, and constant change, which made automation difficult to impossible before AI," said Michael Delgado, chief executive officer and co-founder of Canals.
What started as an AI sales order entry tool has expanded into an end-to-end workflow suite spanning sales, customer service, accounting, purchasing, and receiving.
What could go wrong? Wholesale distribution is a fragmented, relationship-driven industry where trust matters. Convincing thousands of mid-market distributors to hand critical workflows over to AI — especially around invoicing and purchasing — requires proving accuracy at scale. Any missteps in order processing or payments could undermine adoption fast.
Competition is also heating up. As AI tools proliferate, larger enterprise software players could target the same vertical, squeezing a specialist like Canals.
The signal: Canals' path to $35M — bootstrapping to over 100 customers and $5B in processed payables before taking venture capital — stands out in a market flooded with pre-revenue AI startups chasing vertical plays. Base10 Partners, an investment fund with a thesis centred on automation for the real economy, is betting that wholesale distribution's sheer transactional volume and legacy inefficiencies make it one of the highest-ROI verticals for AI. With Dealroom classifying Canals as a "breakout" stage company, the race is on to become the default AI layer for an $8.2T industry before horizontal enterprise players move in.
Read more: benzinga.com
