Tolan ARR hit $12M
Jul 4, 2025
Tolan, the AI companion app developed by Portola, has achieved a $12 million annual recurring revenue (ARR) run rate within just a few months of its launch. The app features a 3D, voice-native AI alien character that interacts with users in a playful and engaging way, offering personalized conversations and emotional support.
Key highlights about Tolan’s growth and features:
Rapid user adoption: Over 3 million downloads and 100,000 monthly active users shortly after launch.
Monetization success: Reached $1 million ARR within months, then scaled quickly to $12 million ARR, driven by strong user engagement and viral growth on platforms like TikTok and Instagram.
Unique user engagement: Users spend 30 to 40 minutes chatting per session, indicating deep emotional connection and real-time AI conversations that feel meaningful.
Innovative AI design: Tolan uses personality frameworks (Big Five, Myers-Briggs) to tailor AI personalities to users, making the AI feel like a familiar yet interesting companion.
Funding: Portola raised a $10 million seed round led by Lachy Groom, with participation from notable investors including Nat Friedman and Daniel Gross.
Vision: The team aims to create an AI companion that helps users feel grounded and supported, blending creativity, storytelling, and AI technology.
Tolan did it through a combination of factors centered on product-market fit, smart monetization, and viral marketing:
Authentic AI companion experience: Tolan offers a personalized, voice-based AI alien companion that remembers past conversations and creates emotionally resonant, real-time interactions. This authenticity made users engage deeply, with many chatting 30 to 40 minutes daily, fostering strong user retention and loyalty.
Early monetization due to high AI costs: The significant operational costs of running AI conversations forced Tolan to implement a paywall just two to three weeks after launch. This early monetization helped the team gather clear data on paying customers’ retention and optimize the product accordingly, which accelerated revenue growth.
Viral growth via TikTok and social media: Tolan leveraged TikTok’s algorithm by working with content creators and producing engaging, colorful videos showcasing the alien characters. This organic viral marketing drove large-scale user acquisition at a low cost per install, fueling rapid downloads and revenue.
Strong product-market fit with Gen-Z users: The app resonated especially with Gen-Z women, who used Tolan for emotional support, advice, and companionship. The “wow factor” of the AI remembering personal details created word-of-mouth growth, further boosting adoption.
Innovative AI technology and storytelling: Combining advanced AI models with storytelling and personality design gave Tolan a unique edge in the crowded AI app space, creating a competitive moat and enabling premium pricing