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