AI companion app Tolan has raised $30 million in its latest funding round. Union Square Ventures, Khosla Ventures, and Homebrew led the round. But the app does not work like a regular chatbot. Instead, it gives users an animated cartoon alien that acts as a virtual friend and helps them with daily tasks, emotions, and goals.
In the app, users first take a short personality quiz and then receive a cartoon alien companion. After that, the character talks with them every day, helps plan their schedule, and learns their habits over time. In other words, it works like a personal assistant that also helps with mental well-being.
The new round doubles Tolan’s total funding to about $60 million. The company had already raised $10 million and then $20 million in two earlier rounds. Before this latest raise, Tolan had a valuation of $120 million. However, PitchBook now estimates its value at more than $268 million.
Tolan now has more than 250,000 active users and has crossed 3 million downloads since its launch. In fact, it has hosted over 70 million conversations in the past year alone. About 70% of users are women, and around 40% are parents. The app makes money through paid plans that start at $4.99 per week (about Rs1,400). Additionally, the company says it now brings in more than $10 million a year.
Quinten Farmer, the CEO and co-founder, previously ran Even, a finance app that Walmart bought for $300 million in 2022. His company Portola launched Tolan in February 2025 in the United States, and the app has since grown fast. However, it faces competition from Meta’s AI companion Muse and other similar apps.
One of its biggest rivals, Character.AI, recently filed for bankruptcy, and Disney bought some of its assets. Meanwhile, the rise of AI companions raises concerns about user safety. Specifically, lawsuits in the US claim that some chatbot interactions have harmed users. Despite these risks, companies continue to invest heavily in the space.