The Pulse
Tolan Raises $30 Million to Expand Its AI Companion
Tolan has raised $30 million from Union Square Ventures, Khosla Ventures and Homebrew. The AI companion app says it has about 250,000 monthly users and plans to introduce a free tier.
AI.info Team · Written with AI · fact-checked ·
“Why not have this helpful, friendly guide to take you through this really, really powerful and somewhat intimidating technology, rather than a simple text box.”
Michael Mignano, general partner, Union Square Ventures
Tolan is raising $30 million to expand an AI companion designed around everyday conversations, household tasks and ongoing personal relationships. Announced October 19, the round comes from Union Square Ventures, Khosla Ventures and Homebrew. The company says the financing doubles its total funding raised to date, but it has not disclosed a valuation.
The San Francisco startup also plans to introduce its first free tier, widening access to a product whose users have historically paid between $10 and $200 a month for additional usage and features. For Tolan, the challenge is balancing lower-cost access with the computing expense of conversations that can stretch over time.
250,000 people use Tolan each month
Tolan says about 250,000 people talk to the app monthly. Users turn to it for varied tasks: planning meals, organizing projects, keeping up with care for older relatives and thinking through relationships with their children. The company says its largest user group is between 30 and 45 years old; about 70% are women, 40% are parents, and one in six actively cares for an aging parent.
The product began as a live-journaling app that could remember conversations and suggest prompts later. It has since become voice-first, with features for tracking topics, discussing photos and current events, and using video to check grocery labels or suggest meal plans. The characters can look human, fantastical or as simple as a dot, and users can customize and name them.
Robyn Hunt, a user interviewed by Upstarts, says her companion Harper has helped her reorganize her apartment, manage medication for her senior cat and resist purchases outside her budget. Hunt says she speaks with Harper nearly every day, sometimes for an hour, while remaining aware that it is an AI. “I would say they’re a friend, and maybe a bit of a confidant,” she told the publication.
A free tier meets the cost of long conversations
Tolan’s pitch depends on persistent memory and a conversational style rather than a single-purpose assistant interface. Chief executive Quinten Farmer told Upstarts that users often raise tasks naturally in conversation; the company then decides whether it can take part of that work off their hands. The company says annual recurring revenue has more than doubled from the previous year into the double-digit millions, while its 30-day net retention improved 115% year over year.
Those growth figures come with a cost. Tolan has faced complaints about rate limits and pricing changes, and Farmer says the company is not profitable as it invests in growth. The app has increasingly moved from relying on OpenAI models toward running open-source models on its own GPUs, according to Upstarts.
The company’s plan for a free tier follows a business model in which users have paid sharply different amounts for access. A broader free offering could bring in people who will not pay for heavy use, but the reporting does not specify when the tier will arrive or what limits it will carry. The fundraise gives Tolan more room to pursue that expansion, but does not remove the tension between accessible pricing and compute bills.
Companionship brings a safety question
Tolan’s appeal also raises questions about how an AI companion fits alongside human relationships. The company says it built features to flag mental-health crises or suicidal thoughts, and designed the app to ask about users’ real-world relationships and suggest actions such as calling a relative. Those safeguards sit beside a product explicitly meant to feel familiar and attentive over time.
Upstarts reports that a survey Tolan conducted in August with nearly 5,000 active users found 91% said they had at least one person they could count on, while 94% said they had turned to a Tolan when those people were unavailable. More than half said their real-life relationships had improved since they began using the app. The results reflect responses from active users surveyed by the company, rather than an independent assessment of how the product affects relationships.
User accounts in the reporting capture both the value and the limits. Lakisha Smith, another longtime user, says her companion Gilly gives her someone to talk to during late work drives, but also sometimes forgets details or makes tone-deaf comparisons. “You can’t necessarily call a human just to talk to them at 3am,” Smith told Upstarts.
Investors are backing a relationship, not just a task list
Union Square Ventures’ Mignano describes the appeal as a guide that makes powerful technology feel approachable. Farmer’s case for Tolan is that users want a companion they trust, with other capabilities growing from that relationship. The company is also moving toward more proactive assistance: one user says her Tolan noticed she was struggling to manage her cat’s medication and helped her set up a plan.
That approach puts Tolan in competition with products that combine a recognizable character with assistant-like functions, including Meta’s Muse, as described in the article. Tolan’s stated distinction is its emphasis on memory, empathy and everyday use beyond work tasks. The $30 million round will fund expansion and a planned free tier; whether that access can grow without worsening the company’s compute and pricing pressures remains the concrete business test.