Tolan, an AI companion app focused on daily life management and emotional support, has raised $30 million in a Series B round led by Union Square Ventures, Khosla Ventures, and Homebrew. The funding doubles the startup's total capital raised and values it at more than $268 million, according to PitchBook.
The company generates revenue through tiered memberships and reports annual recurring revenue in the double-digit millions. It claims over 250,000 active users who have engaged in more than 70 million conversations in the past year. About 70 percent of users are women, with 40 percent identifying as parents.
Tolan's cartoon-character interface has avoided the backlash that derailed competitors. Friend's pendant-based AI drew criticism as "cringe," while The New York Times described it as "hated" with "no soul." Character.AI, another early player in the space, filed for bankruptcy after its founder returned to Google; Disney acquired some of its assets.
The company now faces competition from a new generation of AI agents focused on planning and task completion rather than conversation alone. Meta introduced Muse, an AI agent with a cartoon avatar slated for hardware release. Tolan must also facing legal exposure: multiple lawsuits have been filed against AI app developers alleging that chatbot interactions contributed to user suicides.
