Tolan, the AI companion designed to help people manage their daily lives, navigate relationships and emotions, and accomplish their goals, has just expanded its runway with another $30 million in capital.
The startup’s investors in the latest round include Union Square Ventures, Khosla Ventures, and Homebrew, doubling the total amount it has raised to date and pushing its valuation beyond the previous $120 million, according to a new report by Upstarts Media. (The startup didn’t disclose its new valuation, but PitchBook estimates it at more than $268 million, with “medium confidence.”)
Users engage with Tolan’s app through a cartoonish character that’s meant to offer support and help them get through their to-dos.
Tolan generates revenue from its tiered memberships, which are required for full access to all features. The company told Upstarts Media its annual recurring revenue is now in the “double-digit millions.”
The startup is one of the few AI companions that have found some traction, as it claims to have more than 250,000 active users who have had more than 70 million conversations over the past year. Around 70% of its users are women, and 40% are parents, Tolan’s team told the news outlet. (Anecdotally, the app is said to appeal in particular to neurodivergent people, who may benefit from additional support, whether that’s emotional support or help with organizing tasks.)
Compared with other companions, Tolan seems to have found a balance between being helpful without being perceived as too weird. Compare that with the public shaming that Friend’s pendant-based AI companion faced; users dubbed Friend “very cringe“, The New York Times called it “hated,” and Wired said it “has no soul.”
Meanwhile, another former top contender in the space, Character.ai, recently filed for bankruptcy after its founders’ return to Google. (Its remaining staff is transitioning to Disney, which bought some of its assets.)
However, Tolan could end up facing increased competition from the more recent crop of AI agents, which help users plan, organize, and accomplish their tasks and goals, not just talk their way through them. For instance, Meta gave its AI agent Muse a cute avatar for its users to talk to, which it also plans to release as a hardware product in the future.
The startup also has to navigate the risks of offering AI-powered emotional support, given that multiple lawsuits have been filed against general-purpose AI app makers alleging that chatbot interactions contributed to users’ suicides.
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