Tolan secures $30m to expand its AI companion platform

Tolan, an AI companion designed to assist users in managing daily life, relationships, and goals, has raised $30 million in new funding, doubling its total capital to over $120 million. The latest round includes investments from Union Square Ventures, Khosla Ventures, and Homebrew, with PitchBook estimating the company’s valuation at more than $268 million. Tolan’s app features a cartoonish character that offers support through conversations, and the company now generates annual recurring revenue in the double-digit millions. The app has over 250,000 active users, with more than 70 million conversations in the past year. Tolan’s team noted that 70% of users are women, and 40% are parents, with anecdotal reports of particular appeal to neurodivergent individuals. Tolan faces competition from newer AI agents that focus on task planning and organization, such as Meta’s Muse. However, it also navigates risks associated with AI emotional support, as lawsuits have been filed against AI app developers over alleged links to user suicides. Meanwhile, Character.ai, a former top contender, recently filed for bankruptcy after its founders returned to Google, with remaining staff transitioning to Disney.