Pepper acquires Alima, a startup supported by Y Combinator, to integrate AI into food distribution catalogs | TNW

      Pepper, a technology platform based in New York catering to independent food distributors, has acquired Alima, a startup supported by Y Combinator that developed software for ordering and procurement aimed at small food distributors in Latin America. The acquisition, revealed on Tuesday with unspecified financial details, integrates Alima’s two cofounders into Pepper's leadership and amplifies the company’s focus on AI-driven product content and data infrastructure in an industry that predominantly relies on phone calls, faxes, and personal interactions.

      Jorge Vizcayno, Alima’s CEO, will oversee Pepper’s product content platform and data infrastructure, utilizing AI to enhance product catalogs on a large scale. Blanca Espinosa, the chief marketing officer and cofounder of Alima, will manage customer implementation, using AI tools to streamline the onboarding process, which has traditionally been a challenging aspect of selling software to food distributors.

      While the acquisition may seem minor on its own, it reveals insights into the future direction of vertical software for food distribution. Both Pepper and Alima were founded on the same principle: independent food distributors, responsible for over two-thirds of food distribution in North America and managing more than $1.4 trillion in sales annually, are notably underserved by technology.

      Founded in 2021, Alima approached this challenge from the Latin American perspective, where the technology gap is even more pronounced. According to their estimates, over 85% of B2B food suppliers and distributors in the region lack digital sales capabilities. Alima created an ordering platform for small to mid-sized distributors, initially focusing on fresh produce procurement in Mexico. The startup participated in Y Combinator’s Winter 2022 batch and secured $1.5 million in seed funding from Soma Capital, YC, The Dorm Room Fund, and angel investors.

      On the other hand, Pepper has evolved into a comprehensive platform that encompasses ordering, sales and marketing, accounts receivable, and integrated payments for food distributors in the U.S. The company has raised $99 million in three funding rounds, with the latest being a $50 million Series C in February led by Lead Edge Capital, alongside participation from ICONIQ, Index Ventures, Greylock, Harmony Partners, and Interplay. Currently, it serves over 500 distributors, equating to around $30 billion in annual gross merchandise volume.

      The strategic rationale behind the acquisition focuses on product content, which involves managing extensive and fragmented catalogs across thousands of SKUs from various suppliers. In food distribution, product data is often disorganized: item descriptions differ among suppliers, packaging types vary by region, and prices frequently fluctuate. Pepper has been developing AI systems to automatically match and enhance this data, and Vizcayno’s expertise in building similar infrastructures for Latin American distributors makes this acquisition valuable in terms of talent and technology as well as market expansion.

      Espinosa’s role is also significant. Customer implementation, which is crucial for transitioning distributors to new technology platforms, is often where many vertical SaaS companies lose clients. Distributors typically have limited technical staff, outdated systems that resist integration, and operations that cannot afford downtime during the transition. Pepper is betting that AI-assisted onboarding can significantly reduce the lengthy process that has historically taken months, and Espinosa’s experience in customer acquisition at Alima positions her well to lead this initiative.

      This marks Pepper’s second acquisition in just seven months. In August 2025, it took over Kimelo, a distribution tool set that included a restaurant supply ordering application. The speed of these acquisitions indicates that Pepper is consolidating a fragmented landscape of small vertical tools into a unified platform, a strategy that is familiar in other industries but still relatively novel in food distribution.

      The broader context indicates that food distribution technology is still in its early stages, despite the large potential market. Independent distributors are crucial to the food supply chain, linking farms and manufacturers to restaurants, grocery stores, and institutions that provide food to people. However, technology adoption in this industry lags significantly behind sectors like logistics, retail, and financial services.

      Pepper’s list of investors, including Index Ventures and Greylock, suggests that substantial venture capital is entering the sector. The $50 million Series C in February established the company's valuation at an undisclosed amount but positioned it as a frontrunner in a market that lacks a dominant platform. The acquisition of Alima adds expertise in the Latin American market and a bilingual founding team, which will likely be essential for Pepper as it aims to grow beyond the U.S. to sustain its funding trajectory.

      For Alima’s founders, the perspective is practical. Vizcayno described the acquisition as a natural continuation of Alima’s journey. Whether this perspective reflects a strategic alignment or the reality that a $1.5 million seed-stage startup in a challenging Latin American market found a quicker route to impact within a better-funded platform essentially conveys the same message in two different ways.