Augment Acquires Merlin to Boost AI in Distribution

Augment, a prominent player in AI-driven supply chain solutions, has significantly expanded its reach by acquiring Merlin, a previously undisclosed technology firm specializing in artificial intelligence for the wholesale distribution industry. This strategic move integrates Merlin's advanced capabilities into Augment's core AI offering, Augie, marking a substantial push into a sector estimated to be worth over $8 trillion in the United States alone.

The acquisition brings seasoned leadership to Augment, with Alex Moazed, founder of Applico Capital and a veteran of the distribution sector, stepping into the role of President of Wholesale Distribution. He is joined by Merlin's co-founders, Nick Johnson and John Schumacher, who previously led AI initiatives at industry giant Grainger. Merlin had been operating discreetly, securing initial enterprise clients that collectively manage more than $20 billion in distributor revenue. Notable among these early adopters are Ewing Outdoor Supply, Insco Distributing, Brooks Safety Solutions, and Reece.

This integration aims to provide wholesale distributors with a unified AI platform designed to streamline the entire quote-to-cash process. The consolidated system will manage critical functions such as sales order entry, portal automation, supplier relationship management, and freight coordination. Furthermore, it incorporates a knowledge hub for rapid access to internal company information, addressing a long-standing need for technological modernization in an industry often reliant on outdated systems and manual processes.

The wholesale distribution sector, while foundational to numerous economic activities—from healthcare supply chains to manufacturing and construction—has historically lagged in digital transformation. Augment's CEO, Harish Abbott, highlighted this disparity, stating, "Distributors represent one of our most vital industries... yet they still run on legacy systems and spreadsheets. That changes now." The acquisition of Merlin is positioned as the catalyst for this change, extending Augie's operational footprint deeper into the supply chain.

A key tenet of the acquisition, emphasized by Alex Moazed, is the commitment to data security and customer trust. "Our top priority is putting the customer first. This industry runs on trust, and distributors rely on us not only to deliver AI automation, but to safeguard their data, one of their most valuable assets." Merlin's operational model ensured that customer data remained proprietary, with AI learning confined to individual enterprise environments, a crucial assurance for businesses entrusting sensitive information to new technology platforms.

The integration of Merlin's specialized AI tools into Augment's broader platform is expected to unlock significant efficiencies for distributors. By centralizing complex workflows and providing intelligent automation, Augment is targeting a market ripe for innovation. The company's previous capital raises, totaling $110 million, underscore its ambition to become a dominant force in applying AI to complex B2B operations, particularly within the vast and critical wholesale distribution network.