Why This Matters to Distributors: The funding highlights continued investor interest in AI built specifically for wholesale distribution. As distributors seek to improve inventory turns, reduce excess stock and automate purchasing decisions, investment is flowing into software that promises measurable gains in forecasting accuracy and operational efficiency.
Lantern, a developer of artificial intelligence software for wholesale distributors, has raised $7 million in seed funding to expand its demand forecasting and inventory management platform and accelerate growth into additional distribution markets.
The funding round was led by Primary Venture Partners and Pear VC. Lantern said it has raised $7 million in total to date.
The company plans to use the capital to hire software engineers in Silicon Valley, expand its machine learning capabilities, develop new AI products, and grow its commercial operations as it enters additional distribution verticals.
Lantern’s software analyzes inventory, purchasing and demand data to recommend what distributors should buy, how much they should order and when inventory should be replenished. The platform integrates with existing enterprise resource planning systems, allowing distributors to adopt the technology without replacing their core business software or significantly changing purchasing workflows.
Co-founder and president Conor Leen said many distributors continue to rely on manual forecasting processes and institutional knowledge when making purchasing decisions.
Lantern said customers using its software have achieved 10% higher sales, 30% leaner inventory and significant reductions in manual purchasing work. The company did not provide independent verification of those performance metrics.
The company said it primarily serves distributors in HVAC and refrigeration, industrial, plumbing, and electrical markets. It plans to expand into additional distribution sectors.
Lantern’s customers include Schaedler Yesco, Porter Pipe & Supply, Hills Distribution, R&E Supply, Arbill, Kele Inc. and CAPP.
Lantern said the investment will support continued development of its forecasting platform while laying the groundwork for additional AI applications designed for distributors.
The funding comes as venture capital firms continue to back software companies focused on wholesale distribution, a sector that has drawn increasing attention as distributors invest in AI to improve inventory productivity, reduce working capital, and offset labor shortages.
Jason Shuman, a general partner at Primary Venture Partners, said customer feedback was central to the firm’s investment decision.
The investment reflects broader momentum behind AI adoption in wholesale distribution, where companies are moving beyond generative AI pilots and investing in operational applications that directly affect purchasing decisions, inventory levels, and customer service. As distributors face continued pressure to improve productivity while controlling costs, demand forecasting and inventory optimization have emerged as some of the earliest and most measurable uses of AI across the industry.
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