Entity matching (EM), the task of identifying whether two descriptions refer to the same entity, is essential in data management. Traditional methods have evolved from rule-based to AI-driven approaches, yet current techniques using large language models (LLMs) often fall short due to their reliance on static knowledge and rigid, predefined prompts. In this paper, we introduce Libem, a compound AI system designed to address these limitations by incorporating a flexible, tool-oriented approach. Libem supports entity matching through dynamic tool use, self-refinement, and optimization, allowing it to adapt and refine its process based on the dataset and performance metrics. Unlike traditional solo-AI EM systems, which often suffer from a lack of modularity that hinders iterative design improvements and system optimization, Libem offers a composable and reusable toolchain. This approach aims to contribute to ongoing discussions and developments in AI-driven data management.