Lemma announced a $2.3 million pre-seed round on Aug. 13, 2026, to expand its monitoring tool that helps engineering teams catch silent AI agent failures in production. The company was founded by Jerry Zhang and Cole Gawin and was recently named by Forbes as one of the top startups to watch from Y Combinator’s Fall 2025 batch.
Lemma analyzes live production traffic to surface agent failures that dashboards miss, including agents stuck in loops, failed tool calls, and misread intent. The company says it has just crossed 1M agent traces per day; it detects each failure to its root cause and pushes a proposed fix back into the codebase so detection and resolution happen in one workflow.
“As AI agents take on critical work in healthcare, finance, and law, a single silent miss can cascade into lost customers and real product damage. Agent failures rarely announce themselves, since nothing crashes and no error is thrown while the user quietly walks away,” the company says.
“Cole and I started Lemma because we experienced the pain of building AI agents firsthand,” said Zhang. “We kept running into the same problem: agents would appear to work, but the results weren’t reliable enough in production. We wanted to build the tools we wished we had: something that helps teams catch issues earlier, learn from production data, and continuously improve agent performance in the real world.”
“We’re in the very early innings of improving agent quality, and I’m excited to see the Lemma founders tackle it with a focus on silent failures and automated resolution,” said Ilya Sukhar, General Partner at Matrix.
“Existing tools tell you what broke after the fact. Lemma tells you whether the agent actually did its job, catching silent failures before users churn,” said Ashley Smith, Founder of Vermilion Cliffs Ventures. “Jerry and Cole hit the same wall building agents at two unrelated companies, so they understand this problem from the inside. They bring infectious energy and obsessive problem-solving to catching the silent failures that erode trust, and they’re moving faster than anyone I’ve seen.”
The round includes participation from Matrix, Y Combinator, Liquid 2 Ventures, Vermilion Cliffs Ventures, Irregular Expressions, Cervin Ventures, Comma Capital, Position Ventures, and Eight Capital, plus angels and operators from OpenAI, xAI, Meta, and DoorDash. The funding will support product development and expansion of Lemma’s agent failure detection tools, aimed at seed-to-Series B teams already running agents in production at meaningful volume.
How Lemma detects AI agent failures
Lemma is releasing a launch video that recreates the viral Obsession restaurant scene to demonstrate how AI agents can appear to be working normally while quietly getting things wrong.
To see how it works or book a demo, visit www.uselemma.ai.
About Lemma
Lemma is a production monitoring and observability platform for AI agents. Founded by Jerry Zhang and Cole Gawin, who met as freshmen in USC’s startup incubator, Lemma helps engineering teams uncover hidden semantic failures, diagnose root causes across thousands of traces, and deploy automated fixes, enabling AI agents to continuously improve from real-world usage instead of silently degrading. To learn more or book a demo, visit www.uselemma.ai.
