Augment, a San Francisco company that builds AI software for supply-chain operations, said on 29 April 2026 that it had acquired Merlin, an AI startup that had been working in stealth on software for wholesale distributors.
Financial terms were not disclosed. Merlin's technology is being folded into Augie, the AI assistant that Augment sells as a digital teammate for logistics staff. Merlin's leader, Alex Moazed, joined Augment as president of wholesale distribution, and his co-founders Nick Johnson and John Schumacher joined with him.
The deal marks Augment's first move into wholesale distribution, a US market that the company sized at more than $8 trillion. Until now its customers have been freight brokers, shippers and carriers.
What Merlin built
Merlin built a single AI platform aimed at the quote-to-cash process inside a distributor: turning customer requests into quotes and sales orders, automating work in supplier and customer portals, coordinating with suppliers, arranging freight and fulfilment, and giving staff a searchable hub of internal product and operating data.
Orders arrive at distributors in many forms, and the software was designed to take them from email, phone calls, text messages and PDF documents. The companies said each customer's data stays inside that customer's own environment and is not used to train models shared with other customers.
Although it had not launched publicly, Merlin was already working with enterprise customers that together represent more than $20 billion in distributor revenue. Named early customers include Ewing Outdoor Supply, Insco Distributing, Brooks Safety Solutions and Reece. FreightWaves quoted Mike Mackey, commercial services manager at Ewing Outdoor Supply, as saying the software saved him 80% of the time he spent on quoting.
“For the past decade, we've seen firsthand the challenges facing B2B distributors. AI is finally ready to solve them — but no provider was meeting the needs of enterprise wholesale distributors.”
Why Augment is buying
Augment's Augie uses agentic AI to follow standard operating procedures written in plain language. According to FreightWaves, freight brokers and carriers repeatedly asked Augment chief executive Harish Abbott whether the product also worked for distributors, which are among their largest customers. Augment described Augie as its flagship AI teammate.
Abbott, Augment's co-founder, said distributors are one of the most vital industries, keeping hospitals, factories and home builders supplied, yet still run on legacy systems and spreadsheets. He said Merlin's product connects with what Augie already does and extends its reach further across the supply chain.
Moazed told FreightWaves that by the time acquisition talks became serious, the cultural and technical fit between the two companies was already clear. He also said distributor data is a competitive advantage that customers expect to be protected.
The founders
Moazed is the founder and chief executive of Applico and a founding partner of Applico Capital, which FreightWaves described as the first venture capital fund dedicated to the distribution industry. He said he had evaluated more than 700 supply-chain technology companies while running the fund.
Johnson is a managing partner at Applico Capital. Schumacher was previously vice president of product management and data science at Grainger, the industrial supplies distributor, where Pulse 2.0 described him as head of AI.
The links between the companies predate the deal: Applico Capital took part in Augment's seed round in January 2025, according to FreightWaves. Merlin's own funding and founding date were not reported.
Augment's backers
Augment said it has raised $110 million from investors including Redpoint Ventures, 8VC and Applico Capital. It did not disclose a valuation or say how the Merlin purchase was paid for.
The company did not give a timeline for bringing Merlin's features into Augie or say how many Merlin employees were joining beyond the three founders.
Distribution Strategy, a trade publication covering the sector, described the deal as Augment's push deeper into wholesale distribution, combining Merlin's distributor-specific tools with the general Augie platform. Moazed said in the announcement that the company's top priority was putting customers first, adding that distributors rely on it not only for AI automation but also to safeguard their data, which he called one of their most valuable assets.
