AI Startups: Logistics Startup Pallet Raises $27 Million to Scale Automation

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Artificial intelligence logistics software startup Pallet raised $27 million in a Series B funding round led by General Catalyst, according to a Tuesday (May 27) press release.

Logistics is an $11 trillion global industry, but it runs on legacy software and manual processes, General Catalyst said in a company blog post Tuesday. The industry is responsible for moving more than 20 billion tons of freight annually in the United States alone.

“[As] global supply chain pressures continue to evolve, the urgency to modernize logistics infrastructure has never been greater,” the post said.

Pallet’s flagship AI platform, CoPallet, tackles this problem by automating manual back-office operations specifically for logistics providers such as order entry, quoting and portal updates, according to the post. It does so 10 times faster and at less than half the cost of traditional staffing.

The Series B funding will support Pallet’s efforts to scale its AI infrastructure and continue building what General Catalyst called a “new operating system for the logistics industry,” per the post.

“With tariffs driving up costs across the board, the ROI was obvious, and our biggest challenge became keeping up with demand,” said Pallet founder Sushanth Raman in the post.

Raman said a mid-sized carrier was able to reallocate 25 employees who were doing repetitive order entry, saving millions of dollars, per the post.

Joining General Catalyst in the funding round were existing investors Bain Capital Ventures, Activant Capital and Bessemer Venture Partners, according to the press release.

The PYMNTS Intelligence report “The Enterprise Reset: Navigating Tariffs, Supply Chain Shifts and Cost Pressures” found that enterprises see cost and logistics pressures intensifying given the President Donald Trump administration’s unpredictable and sweeping tariff strategy. In an April survey of 60 U.S. companies with revenues of over $1 billion, nearly all said they expect to pay more for raw materials and finished goods.

Nearly 9 in 10 chief operating officers said new tariffs will lead to greater economic uncertainty and planning challenges, the report revealed. Cost-cutting and operational efficiency are at the center of their solutions. Such moves signal a break from business as usual, with many companies replacing suppliers, redesigning their products or leaning into just-in-time inventory models.

US Probes Insolvent Builder.ai

U.S. prosecutors asked Microsoft-backed Builder.ai to hand over internal data after the startup disclosed its sales were overstated, Bloomberg reported Monday (May 26).

The U.S. Attorney’s Office for the Southern District of New York sought Builder.ai’s customer list, information about its accounting policies and other data, the report said.

United Kingdom-based Builder.ai was once a much-heralded AI unicorn — a startup that has reached a valuation of at least $1 billion — that offered a no-code or low-code AI platform for rapid app development.

It had attracted more than $500,000 in investments from Microsoft, SoftBank, the Qatar Investment Authority and others, making it one of the U.K.’s best-funded startups, the Financial Times (FT) reported May 20.

However, an internal investigation revealed that the startup had overstated its revenues. A partner at its auditor, PKF Littlejohn, also had a long-standing link with founder Sachin Dev Duggal, the FT reported separately.

Duggal has stepped down as CEO but will stay on the board and retain his title as “chief wizard,” according to the FT’s May 20 report. New CEO Manpreet Ratia said the startup is running out of money and unable to meet payroll.

In 2024, Duggal was named by authorities in India in relation to a high-profile criminal probe. Duggal has denied wrongdoing, the report said.

Builder.ai did not reply to PYMNTS’ request for comment.

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