A lot of the global economy still runs on PDFs, spreadsheets, phone calls, and people manually retyping purchase orders into aging systems.
That may sound surprising in an era dominated by AI headlines, but for the wholesale distribution industry, friction remains part of daily life. Orders arrive in inconsistent formats. Invoices get lost in email chains. Teams still rely heavily on institutional knowledge trapped inside the heads of long-time employees.
Miami-based Canals thinks that’s exactly where AI can matter most.
Today, the company announced a $35 million funding round led by Base10 Partners, as investors place a major bet on Canals’ effort to modernize one of the largest and least glamorous corners of the economy: wholesale distribution.
The industry itself represents an estimated $8.2 trillion market. Yet despite its scale, many distributors still operate with workflows that feel stuck between the analog and digital eras.
Canals’ software is designed to automate the constant back-and-forth between distributors, suppliers, and customers using AI. The company says customers have seen quote conversion rates double while reaching 96% touchless invoice processing.
“From conversations with many Canals customers as well as our own contacts in wholesale distribution, we kept hearing the same thing over and over again: Canals is customer-obsessed and delivers outstanding ROI. Its technology and team are clearly the best in the market,” commented Jason Kong, GP at Base10 Partners, in the company’s announcement.
For Canals CEO and co-founder Michael Delgado (pictured at the top of this post), the issue was that older automation tools struggled to handle the unpredictability of real-world operations.
“Our customers operate in the real world, with messy inputs, imperfect data, and constant change, which made automation difficult to impossible before AI,” Delgado shared in the release. “We’ve built the most accurate AI for wholesale distribution to finally free teams from manual data entry and enable stronger relationships across the supply chain.”
Canals says it already works with more than 100 distributors, including DSG, Locke Supply, and The Kendall Group. According to the company, it has processed more than 8 million sales orders and $5 billion in payables since launching in 2022. Perhaps most notably, the company says it achieved that traction without raising venture capital until now.
“As DSG has expanded to serve customers across electrical, HVAC, plumbing, and waterworks, technology has always been a key enabler of our growth. Canals is now our gold standard for how technology can continue driving the business forward,” said Paul Kennedy, CEO of DSG and current Chair of the Board of Directors of the National Association of Electrical Distributors.
Kennedy added: “There’s a lot of hype when it comes to AI, but Canals is the real deal, the best-in-class product delivering real results that matter.”
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