AI Companion Tolan Raises $30M as Revenue and User Engagement Grow

AI companion app Tolan has raised $30 million in funding led by Union Square Ventures, with participation from Khosla Ventures and Homebrew. The investment doubles its total funding to around $60 million. The company has not disclosed its new valuation, though PitchBook estimates it at more than $268 million, up from $120 million previously.

Tolan was founded in 2023 by Quinten Farmer, Evan Goldschmidt and Ajay Mehta under the name Portola. Farmer, the company’s CEO, previously co-founded the financial technology company Even, which Walmart acquired in 2022. Tolan launched in February 2025 and allows users to build ongoing relationships with personalised AI characters. The companions remember conversations and help users manage emotions, relationships, family responsibilities and everyday tasks.

The company reports around 250,000 monthly active users and more than 70 million conversations over the past year. Around 70% of users are women, 40% are parents, and one in six cares for an ageing parent. Annual recurring revenue has more than doubled year-on-year to the double-digit millions. Tolan reports a 115% year-on-year improvement in its 30-day net user retention metric. The company is not yet profitable and plans to introduce its first free tier.

Tolan is expanding beyond conversation into practical assistance, including meal planning, shopping and family organisation. It faces competition from Meta’s Muse AI companion and other emerging AI agents. The company has introduced safeguards for users experiencing mental health crises and encourages connections outside the app. In an August survey of nearly 5,000 active users, 94% said they had turned to Tolan when people in their lives were unavailable, while more than half reported improvements in their real-world relationships.

Source: Tech Crunch