Mar 5, 2024 - Business

TollBit raises $7 million to solve the AI vs. publisher conflict

an illustration of a toll entrance barrier with binary code as the caution stripes

Illustration: Tiffany Herring/Axios

Sometimes there's a simple solution to an intractable problem. The sort of thing that feels obvious, but only in retrospect.

The problem: Online publishers and other content creators face an existential crisis, as AI eventually will help search engines provide contextual, ad-supported answers instead of link-based traffic.

  • Meanwhile, the AI companies face legal challenges in scraping content, and scaling challenges in signing licensing agreements.

The solution: Create a two-sided marketplace for publishers and AI companies.

  • That's the strategy of TollBit, a Boston-based startup coming out of stealth with around $7 million in pre-seed and seed funding.
  • Sunflower Capital led the seed round, while other investors include AIX, Lerer Hippeau, Operator Collective, and Liquid 2 Ventures.

Zoom out: Two-sided marketplaces aren't novel, but haven't yet been applied to this market.

  • TollBit, co-founded by Toast alumni Olivia Joslin and Toshit Panigrahi, basically lets publishers make their verified content available to AI companies, for a fee.
  • Those fees can be dynamic — based on keyword prompt trends, for example — with TollBit providing both sides with pricing insights.
  • It claims that a publisher can get on the platform with just about 15 minutes of IT integration, and that it's already signed some up (without providing names). Moreover, it believes that a third-party will be able to provide valuable usage analytics to companies that instead sign "traditional" licensing agreements.

The big picture: This isn't just about training data, which is what most current licensing deals focus on. Instead, it's looking around the corner on on-demand use cases, in which the app layer company will need to reference primary, real-time content.

Caveats: TollBit is young, founded just months ago, and faces the same chicken/egg problem as other two-sided marketplaces.

  • There's also potential competition from Fox Corp., although its blockchain-based solution seems to only address the first piece of the problem (i.e., verification).

The bottom line: If TollBit succeeds, it could be the sort of win-win that lets publishers survive and AI companies leap their copyright hurdles. Same goes for VCs, many of whom have investments in both.

Go deeper