A new startup, Lava Payments, aims to challenge payment giants by creating a solution for the modern web, where AI agents handle transactions for customers. Founder Mitchell Jones conceived the idea after leaving his previous Y Combinator-backed fintech startup, Lendtable, and experimenting with AI. He recognized the potential to simplify AI and agent payments, making them more developer-friendly.
During his experimentation with an AI app, Jones encountered unexpected costs, spending over $400 to build a basic form-filling agent. He repeatedly faced the same issue—using the same underlying models and tools across different platforms, each requiring a new subscription, re-authentication, and separate payment. This inefficiency frustrated him, as he was already paying for access to the core models.
Jones described the experience as fundamentally broken. He wanted a single wallet, one set of credits, and the flexibility to switch between tools and providers without starting over each time. This frustration led him to launch Lava Payments as a solution.
Lava operates as a digital wallet that allows merchants to use usage credits for transactions. The concept revolves around a unified credit system that works across merchants and services, enabling autonomous agents to make payments without human intervention. Here’s how it works: a merchant enables the Lava wallet for customers, who can then upload credits. These credits can be used at any merchant that accepts Lava or foundational models like GPT and Claude on a pay-as-you-go basis.
Instead of paying for each tool individually, users purchase one-time usage credits that AI agents can deduct as they perform tasks. This eliminates the need for constant transaction approvals. Jones explained that without Lava, AI agents face interruptions when making payments, hindering seamless operation. He compared it to using Google Maps—users don’t pay Google each time they open the app because they’ve already paid their internet provider.
Recently, Lava announced a $5.8 million seed round led by Lerer Hippeau, with participation from Harlem Capital, Streamlined Ventures, and Westbound. The funding will support hiring, product development, and go-to-market strategies. Jones emphasized Lava’s focus on building for the “agent-native economy,” differentiating it from competitors like Metronome.
Growing up in Dayton, Ohio, Jones was raised with the belief that hard work, saving money, and education were the keys to success. He followed this advice, attending Yale, working at Goldman Sachs and Meta, and founding fintech startups Parable and Lendtable. His connection with Lerer Hippeau investor Will McKelvey, a high school friend, played a role in securing funding for Lava.
Jones envisions Lava as the invisible layer powering the AI-driven web, enabling agents to transact and build without friction. He aims to make AI accessible to everyone, including those from modest backgrounds like his own.
The title of this piece was updated to accurately reflect the company’s mission.