Investing in TollBit: The Internet’s AI Toll Booth

AI is changing the economics of the internet. When an AI chatbot can simply answer any question on any topic in the known universe, there’s no need to visit the websites where the bot found those answers in the first place. But without site visits, the advertising revenue keeping many of those sites afloat quickly dries up.

While some larger publishers have begun striking deals with generative AI companies and getting paid for the right to use their content, many mid-sized and smaller digital content owners will either go under or be forced to adopt paywalls to survive. Without a major paradigm shift, the free ad-supported Internet that has thrived for nearly three decades will come to an end.

As AI agents become more accessible and eventually proliferate at an exponential rate, publishers and digital content owners need a way to monetize content that doesn’t rely on eyeballs and clicks. Enter TollBit.

TollBit has pioneered a way to solve this problem while addressing the needs of both publishers and AI developers. By automatically charging AI developers a fee every time an AI tool uses content or data in an output/response, TollBit allows publishers to share in this revenue. At the same time, TollBit also gives AI companies legal and verifiable access to valuable content for both training and RAG use cases.

TollBit’s solution is arriving at a perfect inflection point for the bot-driven Internet and has the potential to help define the new economic model of the Internet for the age of AI. It’s one reason among many why Lightspeed is excited to be leading TollBit’s $24 million Series A financing round.

The new internet economy is here to stay

Over the next five years, virtually every company will offer AI-enhanced products that will require ingestion of content from the Internet.

Beyond the handful of foundation model companies with an insatiable appetite for training data, thousands of AI-native applications will need real-time data in order to respond to user prompts. The global web-scraping market is projected to grow from $2.8 billion in 2021 to nearly $25 billion in 2028, with nearly all of that growth driven by GPT-based applications. Bots now account for just under half of all Internet traffic, up from roughly 38% five years ago. As AI-powered apps proliferate, the volume of bot traffic will soon dwarf that of humans.

TollBit’s first-mover advantages

Though we anticipate that monetizing bot traffic will be a highly competitive market, TollBit has several natural advantages. Because its solution sits on top of the existing and highly fragmented CDN and cybersecurity infrastructure, TollBit avoids the cost and complexity of having to host publishers’ content while allowing new clients to onboard within minutes.

The technology allows publishers to set rates for autonomous access to any URL, allowing them to charge variable rates for premium content. The marketplace approach scales in a way that one-off deals between big AI companies and major publishers cannot possibly match. And, it provides legal content access to AI companies increasingly worried about copyright infringement, IP theft, and violations of computer trespass laws.

Co-founders Toshit Panigrahi and Olivia Joslin bring a wealth of experience on both the supply and demand side of the marketplace from their respective stints at Toast and Fairmarkit. Their strong technical and commercial orientation has allowed the company to build a first-mover advantage in the form of dozens of brand-name publishers already onboarded and live on the marketplace, with another 100+ in the pipeline.

A more open Internet awaits us

We believe that lowering the barrier to data access will accelerate the development of many more AI applications, driving the marketplace flywheel. Directly compensating publishers will incentivize the creation of even more valuable content, while creating a fair and equitable business relationship with AI platform developers.

The business model for the Internet will inevitably have to change, but that doesn’t have to mean the end of what made it great in the first place — open access to virtually unlimited content, vast troves of data available at the click of a mouse. Only in the future, this information will likely be delivered via your favorite AI agent.