Pepper purchases Alima, a startup supported by YC, to integrate AI into food distribution catalogs | TNW

      Pepper, a technology platform based in New York for independent food distributors, has acquired Alima, a startup supported by Y Combinator that developed ordering and procurement software for small food distributors in Latin America. The acquisition, announced on Tuesday without revealing financial details, incorporates Alima’s two cofounders into Pepper’s leadership team and enhances the company’s initiative in AI-led product content and data infrastructure for an industry that largely relies on phone calls, faxes, and personal connections.

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

      Two companies, one vision

      Although the acquisition is modest on its own, it highlights the direction in which software for food distribution is evolving. Both Pepper and Alima were founded on the understanding that independent food distributors, accounting for more than two-thirds of food distribution in North America and generating over $1.4 trillion in yearly sales, are significantly underserved by technology.

      Founded in 2021, Alima addressed this issue in Latin America, where the technology gap is even larger. According to the company’s estimates, over 85 percent of B2B food suppliers and distributors in the region lack digital sales capabilities. Alima developed an ordering platform aimed at small and mid-sized distributors, initially focusing on fresh produce procurement in Mexico. The company participated in Y Combinator’s Winter 2022 cohort and secured $1.5 million in seed funding from Soma Capital, YC, The Dorm Room Fund, and angel investors.

      Meanwhile, Pepper has evolved into a comprehensive platform that encompasses ordering, sales and marketing, accounts receivable, and embedded payments for food distributors in the U.S. The company has raised $99 million across three funding rounds, including a recent $50 million Series C in February, led by Lead Edge Capital with contributions from ICONIQ, Index Ventures, Greylock, Harmony Partners, and Interplay. It now serves over 500 distributors with an approximate annual gross merchandise volume of $30 billion.

      The AI component

      The rationale behind the acquisition focuses on product content, which consists of the extensive and fragmented catalogs food distributors must handle across numerous SKUs from various suppliers. Product data in food distribution is often chaotic: item descriptions differ among suppliers, packaging formats vary by region, and pricing changes frequently. Pepper has been developing AI systems to automatically match and enrich this data, and Vizcayno’s background in creating similar infrastructure for Latin American distributors makes the acquisition valuable in terms of both talent and technology, in addition to market expansion.

      Espinosa’s position is equally notable. Customer implementation, the process of integrating a distributor onto a new technology platform, is where many vertical SaaS companies lose clients. Distributors frequently have limited technical resources, legacy systems that complicate integration, and operations that cannot afford interruptions during migration. Pepper anticipates that AI-assisted onboarding can significantly shorten what has typically been a lengthy process, and Espinosa’s expertise in customer acquisition at Alima equips her to lead this initiative.

      This marks Pepper’s second acquisition in seven months. In August 2025, it purchased Kimelo, a distribution toolset that featured a restaurant supply ordering application. The ongoing acquisitions indicate that Pepper is consolidating a fragmented market of small vertical tools into a unified platform, a strategy seen in other industries but still relatively nascent in food distribution.

      A $1.4 trillion market, still reliant on traditional methods

      The overall context is that food distribution technology remains in its early stages despite the vast 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 sector lags significantly behind similar industries such as logistics, retail, and financial services.

      Pepper’s roster of investors, which includes Index Ventures and Greylock, indicates that substantial venture capital is being invested in this area. The $50 million Series C in February assigned an undisclosed valuation to the company, positioning it as a category leader in a market where no dominant platform has emerged yet. The acquisition of Alima adds expertise in the Latin American market and a bilingual founding team to a company that will likely need to expand beyond the United States to sustain its funding trajectory.

      For the founders of Alima, the rationale is practical. Vizcayno characterized the acquisition as a sincere continuation of Alima’s path. Whether this honesty signifies 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, it ultimately conveys the same idea in two different ways.