As artificial intelligence continues to revolutionize the workplace, startups that provide essential tools for businesses harnessing AI are gaining traction. One notable player is Manny Medina, the esteemed founder of Outreach, a company valued at $4.4 billion that specializes in sales automation. Medina has recently introduced his latest venture, Paid, which aims to facilitate seamless and profitable payment solutions for AI agents.
Unlike traditional companies that create AI agents, Paid serves a critical role in ensuring these virtual workers are compensated effectively. The startup announced a successful €10 million (approximately $11 million) in pre-seed funding, backed by well-known investors such as EQT Ventures, Sequoia, and GTMFund.
Medina’s inspiration for Paid stemmed from extensive discussions with various AI platform startups, during which he discovered a pressing challenge: many were unsure of how to price their services effectively. According to Medina, traditional pricing models that dictate fees per user or interaction—characteristic of software like Microsoft Office—simply do not align with the nuances of AI agents. The flexibility of AI means that a single employee can manage multiple agents, or these agents can operate autonomously without human oversight.
Furthermore, businesses developing AI agents face significant hurdles with conventional pricing structures, especially as these agents start assuming tasks traditionally performed by humans. As Medina articulated, clients prefer to pay based on the outcome delivered rather than the individual tasks an agent completes. For instance, rather than compensating for every email sent by an AI in an insurance role, companies want remuneration linked to key performance indicators, like the number of policy renewals handled.
The operational costs for deploying AI agents are also inconsistent and vary according to the number of tokens required for large language model (LLM) training and task execution. This inconsistency raises the question of how AI startups can price their offerings efficiently. “They needed the ability to experiment with different pricing strategies while tracking profitability,” Medina explained. This is where Paid comes into play, enabling agent-oriented companies to establish either fixed or variable pricing models tailored to ensure profitability.
Additionally, Paid provides crucial analytics to monitor agent performance, allowing startups to verify their return on investment effectively. The platform, reminiscent of Zuora’s subscription billing solutions combined with SuccessFactors’ HR management capabilities, is interpreting the new dynamics of AI-focused business models.
Importantly, Paid is targeting emerging startups rather than established enterprises like Salesforce and Microsoft, which also offer competing platforms. As part of its beta program, Paid has already attracted several companies, including Logic.app, 11x, VidLab7, Artisan, and HappyRobot.
Medina highlights that AI agents are not entirely replacing human jobs; rather, they are transitioning specific roles. He demonstrates a keen understanding of AI’s transformative potential, utilizing cutting-edge technologies to develop his new platform. “It’s incredibly invigorating to build a company in this era. We employed just two engineers to develop the entire platform within a month, primarily leveraging AI-driven solutions,” he remarked.
Medina’s journey in tech began at Microsoft, where he played a pivotal role in the Seattle tech landscape before founding Outreach in 2011. Under his leadership, the company scaled from zero to 800 employees and achieved $250 million in annual recurring revenue before he stepped down as CEO. Although he has transitioned from an active executive role, his insights remain valuable as he embarks on this latest ambition in London.