Canals Raises $35M to Bring AI Automation to the $8.2 Trillion Wholesale Distribution Industry

The artificial intelligence boom has largely been defined by chatbots, coding assistants, and enterprise productivity tools. Yet some of the biggest opportunities for AI may lie in industries that remain surprisingly dependent on emails, PDFs, spreadsheets, phone calls, and manual data entry. That is the market Canals is targeting, and investors are betting that the opportunity is far larger than many realize.

Miami-based Canals has announced a $35 million funding round led by Base10 Partners, a firm known for backing companies focused on automating the real economy. The investment arrives as wholesale distributors increasingly look to AI to streamline operations that have historically been difficult to automate due to fragmented systems, inconsistent data, and highly customized workflows.

Why Wholesale Distribution Is Becoming an AI Battleground

Wholesale distribution rarely attracts the same attention as consumer technology or software startups, despite serving as a critical layer of the global economy. The sector connects manufacturers, suppliers, contractors, and customers across industries ranging from electrical and plumbing to HVAC, industrial equipment, and construction materials.

The challenge is that many of these businesses still process large volumes of transactions manually. Purchase orders arrive in multiple formats, invoices are routed through email chains, and employees often rely on years of accumulated institutional knowledge to interpret customer requests.

Canals believes AI is finally mature enough to address these challenges. Rather than requiring customers to conform to rigid templates, the company’s platform is designed to interpret information from emails, PDFs, spreadsheets, handwritten notes, voice messages, and other formats before automatically converting that information into ERP-ready orders and workflows.

The company describes its platform as an “Operating AI” for distributors, automating repetitive tasks across sales, customer service, accounting, purchasing, and receiving.

Moving Beyond Simple Order Entry

Canals initially gained traction through AI-powered sales order entry. The platform automatically interprets customer requests, identifies products, drafts quotes, and prepares orders for approval. Customers have reported substantial reductions in processing time while increasing quote response speed.

Over time, however, the company expanded its ambitions. Earlier this year, Canals unveiled a broader workflow suite designed to automate operational processes across multiple departments, reflecting a larger industry trend toward end-to-end AI automation rather than isolated task automation.

This expansion is important because many distributors operate with interconnected workflows. A sales order often triggers purchasing decisions, inventory checks, invoicing, accounts payable processes, and delivery coordination. Automating only one step leaves significant inefficiencies elsewhere in the chain.

The latest funding is expected to accelerate development of these broader workflow capabilities and help bring additional AI-powered workflow solutions to market.

Growth Without Venture Capital

One of the more notable aspects of Canals’ story is that the company reportedly achieved significant scale before raising institutional venture funding.

The company says it has processed more than 8 million sales orders and over $5 billion in payables while building relationships with more than 100 distributors, including organizations such as DSG, The Kendall Group, and Locke Supply.

According to the company, customers have seen metrics such as doubled quote conversion rates and up to 96% touchless invoice processing. While performance varies across deployments, these figures highlight the growing demand for AI systems capable of handling operational workflows rather than simply generating content.

The fact that Canals reached this level of adoption before securing venture backing likely contributed to investor interest, particularly as many AI startups remain in early experimentation phases with customers.

AI’s Next Major Enterprise Opportunity

The excitement surrounding generative AI has often centered on knowledge workers, software developers, and creative professionals. Yet wholesale distribution represents a massive opportunity for enterprise AI, with an estimated $8.2 trillion market that remains heavily reliant on manual processes and human intervention.

Unlike many AI applications that focus on productivity enhancements, the value proposition in wholesale distribution is often straightforward: process transactions faster, reduce costly errors, improve customer service, and allow employees to focus on relationship-building and higher-value work.

Canals is positioning itself at the center of this transformation. What began as an AI-powered order entry solution has evolved into a broader platform designed to automate workflows across the entire distributor organization, from sales and customer service to accounting and purchasing.

As AI adoption expands beyond digital-first industries and into the operational backbone of the economy, wholesale distribution could emerge as one of the most important proving grounds for enterprise automation. If companies like Canals can successfully eliminate the friction that has long slowed the movement of goods, information, and payments, the impact could extend far beyond individual distributors and reshape how supply chains operate across entire industries.