Faction, a startup that partners with industrial distributors to automate core workflows, raised $4 million in a seed funding round to expand its AI agent technology.

Hidden Capital led the investment, with participation from 640 Oxford, a fund focused on reindustrialization, and Liquid2. Faction, which serves mid-market and enterprise distributors across the U.S. in industrial verticals such as PVF, HVAC, packaging and safety. The San Francisco-based startup’s platform uses AI agents to automate workflows — from quoting and pricing, to sourcing and collections.

Faction said the funding will accelerate development of its product suite — including its AI voice technology which manages inbound and outbound calls — and enable it to meet surging demand for AI solutions from industrial distributors across the U.S.

“Implementing AI is now the biggest competitive advantage for distributors to serve customers better, improve margins, and capture market share,” Faction Co-Founder and CEO Kunal Barman told MDM. “The surge in demand we’ve seen this year underscores how forward-thinking distributors are in seeking an AI partner and platform that works across their business. Distributors are the beating heart of the physical economy — and our mission is to empower them with AI for the decade ahead.”