Magentic raises $5.5M to cut costs in tariff-impacted supply chains with AI

Magentic, an AI agent platform that identifies savings across global manufacturing supply chains, has closed a $5.5 million funding round to fuel team expansion and growth.

Supplier compliance “leaks” are a widespread issue, with 90 per cent of Chief Procurement Officers calling them a critical concern, according to McKinsey & Company. These leaks lead to an average waste of 2 per cent of total spend, equivalent to $40 million on a $2 billion budget. One company using Magentic uncovered profit-impacting errors in 25 per cent of its procurement documents, highlighting the significant hidden value often lost without proper oversight.

Magentic was founded by Robin Van Aeken, who led teams at McKinsey & Company for global manufacturers and Odhran O’Donoghue, who holds a PhD in Machine Learning from the University of Oxford and led advanced AI projects at OpenAI, NASA, and the Crick Institute. The company brings together top-tier AI engineering talent with deep procurement expertise.

Robin Van Aeken, co-founder and CEO of Magentic, said: 

Supply chains are the hidden engines of our world, responsible for every phone, medicine, plane in our lives. Procurement teams are at breaking point, spending hours navigating unstructured information, ever more complex demands, and now global conflict and tariffs.

Magentic integrates ready-to-use AI agents, tailored for procurement and supply chain operations, directly into business processes. These domain-specific AI teammates are built to uncover, prioritise, and capture savings, even in complex, unstructured environments with incomplete or inconsistent data. For example, a $30 billion manufacturer reduced machinery spare parts procurement costs by 4% and is now expanding the use of Magentic’s AI agents to other spending categories.

Odhran O’Donoghue, co-founder and CTO of Magentic, said:

For the first time, we have the technology to understand all our data across previously incompatible systems. At Magentic, we’re motivated by the question: how can complex companies deploy trustworthy, reliable systems capable of following company playbooks to improve outcomes for their suppliers and their customers.

The round was led by Sequoia Capital, with participation from The Westly Group, First Momentum Ventures, and angel investors from SAP, Airbus, McKinsey & Company, Hugging Face, Ironclad, and Rosberg Ventures. 

Julien Bek, Sequoia Capital Partner, said:

Today, the best AI companies are selling outcomes not seats. In the old world, SaaS sold the promise of ROI. In the new world, AI actually delivers it. That's why we're proud to partner with Robin, Odhran, and the team at Magentic - their AI 'Mages' work seamlessly alongside procurement and supply chain teams to drive immediate P&L gains and we can't wait to see the impact they deliver as they continue to build.

Magentic serves customers across consumer packaged goods, pharmaceuticals, and advanced manufacturing in the US and Europe. Its AI teammates are being deployed to help companies prepare for and challenge supplier tariff claims, identify additional savings opportunities, and manage operations end-to-end, always keeping humans in the loop.

The company’s goal is to enable automated, efficient operations while ensuring human expertise and relationships remain at the core.

Lead image: Magentic co-founders | Photo: Uncredited