Paid, AI Agent Startup, Raises $21M Seed Funding

Paid Secures $21.6 Million Seed Funding to Revolutionize AI Agent Monetization

Manny Medina, previously recognized as the creator of the sales automation platform Outreach – valued at $4.4 billion – is generating significant investor interest with his new venture, Paid.

Rapid Funding and Valuation

Paid recently finalized an oversubscribed seed round, raising $21.6 million with Lightspeed Venture Partners leading the investment. Combined with the €10 million pre-seed funding secured in March, the London-based company has amassed $33.3 million in capital, even before initiating its Series A funding round. Sources indicate the startup’s valuation now exceeds $100 million.

A Novel Approach to AI Agent Billing

Emerging from stealth mode in March, Paid introduces a distinctive contribution to the evolving landscape of AI agents. Rather than developing agents themselves, the company provides a platform for agent developers to monetize their creations. This monetization is directly tied to the value these automated systems deliver to users – a concept increasingly known as “results-based billing.”

Medina explains that Paid empowers agent creators to “begin charging based on the margin improvements achieved for their customers.”

Shifting Away from Traditional Software Pricing

This represents a departure from conventional software pricing models. It moves beyond the per-user or unlimited-use fees common in the SaaS and client/server eras, respectively.

Traditional per-user fees are problematic for agent developers, who also incur usage costs from model and cloud providers. Unlimited use models could potentially lead to financial losses, particularly for companies heavily reliant on generative AI.

Demonstrating Agent Value is Crucial

Medina emphasizes that agent providers “must demonstrate the tangible value their agents are providing,” as these systems often operate autonomously in the background. Successful agents will naturally be entrusted with greater responsibilities, but their contributions may go unnoticed without a clear measurement of impact.

“An agent that doesn’t actively demonstrate its value won’t be compensated,” Medina states. “A robust infrastructure is needed to enable agents to charge for the increased workload they handle.”

The Risks of Credit-Based Systems

However, adopting a credit-based system – similar to those used by AI model providers – carries risks for agent developers. Businesses are hesitant to pay for subpar AI output, which remains a common issue. A recent MIT study revealed that approximately 95% of enterprise AI projects fail to deliver value, with only 5% progressing to production.

Organizations are unwilling to fund agents that simply generate unproductive content, such as unread emails.

Early Adoption and Key Customers

Artisan, the rapidly growing sales automation startup, is among Paid’s initial customers. Artisan’s CEO, Jaspar Carmichael-Jack, will be discussing this topic at TechCrunch Disrupt next month.

Paid is also gaining traction with established SaaS companies exploring the integration of agents for growth. The company recently secured a partnership with ERP vendor IFS.

Lightspeed’s Perspective on AI Value

Alexander Schmitt of Lightspeed notes that the firm has invested over $2.5 billion in AI infrastructure and applications over the past three years. They have observed firsthand that a significant number of AI pilot programs fail to yield positive results.

“A central challenge is the inability to accurately quantify the value generated by agents,” Schmitt explains.

A Unique Solution in a Growing Market

Schmitt believes Paid offers a unique solution, stating, “This is a concept we haven’t encountered elsewhere.” Increased competition in the agentic results-based billing space is anticipated if Paid successfully facilitates the widespread adoption of AI agents.

Investment Details

The funding round also included participation from new investor FUSE and existing investor EQT Ventures.