Lantern — an AI-powered demand forecasting startup built for distributors — announced that it has raised $7 million in seed funding.

The San Francisco, CA-based company said the round was led by Primary Venture Partners and Pear VC. Lantern said it will use the funding to hire engineers, accelerate product development and expand the machine learning models that power its recommendation engine.

Lantern’s platform is designed to help distributors make purchasing decisions by using automated, machine learning-driven recommendations that tell buyers what to buy, how much to purchase and when to place orders. The company said its technology replaces purchasing processes that often rely on spreadsheets, ERP rules, institutional knowledge and manual forecasting.

“We started Lantern with a clear thesis. Supply chains run our lives. Wholesale distribution orchestrates the messy middle of our entire supply chain,” Lantern Co-Founder and CEO Matt Rojas said in the release. “Supercharging distribution is the highest leverage thing we can do to improve the lives of every person on the planet.”

Lantern said its customers have seen 10% higher sales, 30% leaner inventory and thousands of hours saved in manual work. The company said its platform integrates with distributors’ existing ERP systems and workflows, and that it is already generating millions of dollars in revenue while serving distributors across most major verticals.

“Every distributor we talk to is running their inventory decisions on tribal knowledge and gut feel,” Lantern Co-Founder and President Conor Leen said. “We built Lantern to give buyers a smart first draft they can trust, so they can focus on strategic issues and exceptions they never have time for.”

Lantern officially launched this past November, noting that the startup was using machine learning to help distributors forecast demand, optimize purchasing decisions, reduce excess inventory and improve fill rates. The company was founded by Rojas, Leen and CTO Jay Shitole.

“Matt, Conor and Jay have that rare combination of deep domain expertise, technical excellence and uncapped vision,” added Mar Hershenson, Co-Founder and Managing Partner at Pear VC. “I’ve met thousands of founders, and they’re clearly at the top. It was a no-brainer to double down on Lantern. They’re building something extraordinary.”

Lantern was born out of research conducted at Stanford University, where the team interviewed more than 200 distributors about operational and technology pain points. Their findings were detailed extensively here on MDM.

“Distribution is the largest industry nobody talks about. It’s the invisible glue holding the economy together,” said Jason Schuman, General Partner at Primary Venture Partners. “When we talked to Lantern’s customers, the verdict was clear: they can’t live without it.”

“Lantern is incredible. Their predictions are so accurate and their product is so easy-to-use. We were up and running in just a few weeks. Their team is fantastic and seems to work 24/7. I thought Lantern was too good to be true but they’ve exceeded every expectation.” — Zak Malawy, Purchasing Manager at Porter Pipe & Supply

Learn more about Lantern and its offerings here.