Pepper purchases YC-backed Alima to integrate AI into food distribution catalogs | TNW

      Pepper, a technology platform based in New York that serves 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, announced on Tuesday without revealing financial details, integrates Alima’s two cofounders into Pepper's leadership team and furthers the company's initiative in AI-driven product content and data infrastructure for an industry that still relies heavily on phone calls, faxes, and personal connections.

      Jorge Vizcayno, the CEO of Alima, will manage Pepper’s product content platform and data infrastructure, utilizing AI to efficiently match and enhance product catalogs at scale. Blanca Espinosa, Alima’s cofounder and chief marketing officer, will oversee customer implementation, applying AI tools to streamline the onboarding process, which has historically been burdensome for software sales to food distributors.

      Two companies, one thesis

      While the acquisition may seem modest on its own, it highlights the direction of vertical software in food distribution. Both Pepper and Alima were founded on the same idea: independent food distributors—who make up over two-thirds of food distribution in North America and generate more than $1.4 trillion in annual sales—are significantly underserved in terms of technology.

      Established in 2021, Alima approached the issue from the Latin American perspective, where the digital gap is even broader. According to the company's estimates, over 85 percent 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 company 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.

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      The latest updates from the EU tech sector, an insightful account from our seasoned founder Boris, and some dubious AI-generated art. Subscribe for free every week to receive this in your inbox! Meanwhile, Pepper has evolved into a comprehensive platform that encompasses ordering, sales and marketing, accounts receivable, and embedded payments for food distributors in the US. The company has raised a total of $99 million across three funding rounds, including a $50 million Series C in February led by Lead Edge Capital, with contributions from ICONIQ, Index Ventures, Greylock, Harmony Partners, and Interplay. Pepper currently serves over 500 distributors, representing around $30 billion in annual gross merchandise volume.

      The AI aspect

      The reasoning behind the acquisition revolves around product content, which involves managing extensive and fragmented catalogs that food distributors must oversee across thousands of SKUs from numerous suppliers. In food distribution, product data can be quite chaotic: supplier descriptions can differ, packaging formats vary by region, and pricing is often inconsistent. Pepper has been developing AI systems to automate the matching and enhancement of this data, and Vizcayno’s experience in creating similar infrastructures for Latin American distributors makes the acquisition beneficial for both talent and technology, as well as a means of market expansion.

      Espinosa’s role is also significant. Customer implementation—the process of transitioning a distributor to a new technology platform—is often where many vertical SaaS companies falter. Many distributors have limited technical resources, legacy systems that are hard to integrate, and operations that can't afford interruptions during migration. Pepper is counting on AI-driven onboarding to reduce what typically takes months into a shorter time frame, and Espinosa’s previous experience in customer acquisition at Alima equips her to lead this initiative.

      This marks Pepper’s second acquisition in a span of seven months. In August 2025, it acquired Kimelo, a distribution toolset that included a restaurant supply ordering application. This rapid acquisition pace indicates that Pepper is consolidating a fragmented market of small vertical tools into a unified platform, a strategy seen in other industries but still emerging in food distribution.

      A $1.4 trillion market, still dependent on traditional methods

      The broader context highlights that food distribution technology is still in its early stages, despite the significant addressable market. Independent distributors are a crucial part of the food supply chain, linking farms and manufacturers to restaurants, grocery stores, and institutions that feed populations. However, the industry's technology adoption lags behind comparable sectors such as logistics, retail, and financial services.

      Pepper’s list of investors, which includes Index Ventures and Greylock, indicates that substantial venture capital is being directed into this space. The $50 million Series C in February valued the company at an undisclosed amount, positioning it as the leader in a category where no dominant platform has yet arisen. The acquisition of Alima adds expertise in the Latin American market and a bilingual founding team, which may be necessary for the company to justify its funding trajectory by expanding beyond the US.

      For Alima’s founders, the viewpoint is practical. Vizcayno referred to the acquisition as a sincere continuation of Alima’s mission.