The generative AI market has expanded at a remarkable pace, giving developers the ability to launch sophisticated applications faster and at lower cost than ever before. Yet as AI adoption grows, many companies are finding that building products is no longer the primary obstacle. The greater challenge is turning those products into sustainable businesses.
Velocity is positioning itself to tackle that issue. The startup has announced a $27 million seed funding round led by NFX and Red Dot Capital Partners, with participation from Stardom Ventures, Corner Ventures, and Transcend. The company is building infrastructure designed to help AI-native applications monetize users and expand distribution without relying exclusively on subscription revenue.
Founded by Tal Shoham, Amir Shaked, and Nimrod Zuta, Velocity draws on the founders’ experience building monetization, advertising, and growth platforms at ironSource and Unity.
The Economics of AI Continue to Shift
The popularity of AI-powered assistants, coding platforms, creative tools, and specialized applications has created one of the fastest-growing software markets in recent memory. At the same time, the financial realities behind these products have become increasingly difficult.
Many AI companies continue to support large free user bases while absorbing rising inference costs as models deliver more advanced capabilities. Because only a small percentage of users ultimately subscribe, developers are often forced to limit usage through prompt caps, feature restrictions, or paywalls.
Velocity believes those strategies may come at the expense of long-term growth.
Rather than asking users to pay earlier in their journey, the company is developing a monetization layer that complements subscriptions. The goal is to allow applications to provide more free usage while generating additional revenue from advertising experiences that align with what users are already trying to accomplish.
A Different Approach to Advertising
The company argues that AI conversations have fundamentally changed how user intent is expressed.
Unlike conventional advertising systems that depend on browsing history or cookies, conversational AI reveals what users are actively trying to learn, build, purchase, or solve. Velocity’s platform is designed to interpret those conversations in real time and surface recommendations directly within AI interactions.
According to the company, its platform combines an AI-native advertising network with a mediation and auction layer that optimizes demand sources, alongside conversation intelligence technology that converts dialogue into structured, privacy-safe intent signals.
For CEO and co-founder Tal Shoham, that represents a significant opportunity for the AI ecosystem.
“AI is becoming the dominant interface for software, creating entirely new opportunities around monetization and distribution,” Shoham said. “We believe the biggest opportunity of the AI era will not only be building products, but also monetizing and distributing them. We’re building the infrastructure layer that helps solve both.”
Shoham added that the company is focused on ensuring monetization supports, rather than disrupts, the user experience.
“AI monetization should feel native to the experience,” he said. “Users expect AI interactions to be useful, contextual, and trustworthy. Our goal is monetization, recommendations, and product discovery that enhance the experience rather than interrupt it.”
Customer Deployments Offer Early Validation
Velocity says its technology has already been adopted by AI-native applications looking to balance revenue generation with user retention.
Diego DÃaz, CEO of the Subscription Division at Leadtech / MAU, described the company as “a great partner to work with,” noting that the team is “responsive, collaborative, and moves quickly.” He added that Leadtech has been impressed by both the product and the people behind it and is confident the partnership “will lead to meaningful outcomes as we continue building together.”
The company also highlighted its collaboration with AIBY’s Chaton application.
Artsiom Turavets, Lead Product Manager at AIBY (Chaton), said Velocity has delivered “strong performance while maintaining a high-quality user experience.” He noted that the company has achieved “meaningful monetization outcomes alongside healthy engagement and retention metrics,” while also praising Velocity’s responsiveness and ability to build tailored solutions.
Investors See Infrastructure Becoming the Next AI Battleground
The investors participating in the round view monetization and distribution as an emerging infrastructure category within the broader AI ecosystem.
Gigi Levy-Weiss, General Partner at NFX, said major platform shifts consistently create opportunities for new infrastructure companies. He believes AI-native applications are becoming one of the largest technology platforms ever created and said Velocity is developing “the growth infrastructure layer that enables that intent to drive monetization, distribution, and growth.”
Atad Peled, Partner at Red Dot Capital Partners, said AI-native applications are creating “a massive new opportunity around user intent.” He added that Velocity’s founders bring a combination of experience building global software platforms, product vision, and go-to-market expertise that positions the company to help define the category.
For Velocity, the long-term vision extends beyond advertising alone. Shoham believes intent will become the defining signal of AI computing, much as keywords shaped search and identity powered social platforms.
“Every major platform has been built around a dominant signal,” Shoham said. “We believe the AI era will be built around intent, and we’re building the growth infrastructure layer to monetize and distribute through it.”